In conversation with Dr. Jaikrishna Pathak
President of The Bombay Yarn Merchant Association and Exchange Limited
Dr. Jaikrishna Pathak, with a hopeful end note, shares his perspective on the present struggles of manufacturers and the expected changes after the pandemic.
- How has the market for yarns changed due to COVID-19?
There have been numerous unpalatable changes in the market, for obvious reasons. The prices of products have fallen due to collapse in demand even as we unlock. Workers have also migrated to their native places. With the partial lifting of lockdown and demands still sitting low, the manufacturers work very infrequently. Owing to all these major reasons, industry is running at 30% production rate. The exports from India have also decreased and to top that, the foreign currency is also lowering down. There is barely any demand in the market, be it national or global.
- How are buyers and sellers responding to the change of demand and supply of yarns in the Indian textile market?
The Indian Textile manufacturing sector is primarily dependent on laborers and workers. The Indian mode of production is not demand-driven manufacturing but forecast based bulk production. As the Eid and Wedding seasons have already passed amid the lockdowns and unlock phases, hence the demand for these seasons were nil. Indian population is at this point more concerned about ensuring a healthy pass from the pandemic, hence, requiring only the essentials, namely household products, and medicines. Hence further shrinking the demand in the textile market. Sellers are trying to revive their production with the minimum orders they are getting, but it’s a long time before the production increases.
- What changes are being made to enhance your supply networks and how is your association prepared to deal with any more ruptures in the market?
We Indians get the samples approved offline, which is not possible anymore. The samples are now being approved online. Our association is more worried about the outstanding payments from buyers and brands. We represent the trader lobby and as traders. Our traders have money in market as dues our focus as an apex association is to recover these dues, and also plan to manage inventory of stock in hand.
- With the onset of COVID-19 pandemic, the shift from offline to online market place is witnessing huge numbers. What challenges are you struggling with right now and what do you foresee in the future?
Our association is a private body of members, we form policies which support the yarn traders and manufacturers. As stated before, traditional businessmen are not habitual of using online mediums for their business practices and deals. They are dependent on their staff, who cannot be called into work due to safety issues. As of now, we are working online, meeting online, contacting buyers and sellers, giving and taking digital payments, the whole business world has now shifted to online. I can see the new business era will combine technology and innovation on virtual platforms, but it will be manifested with the manufacturers being habitual of the digital world.
The challenge right now is the uncertainty surrounding the fashion trends, priorities, and demands. As we are already witnessing a shift in consumer behaviour more inclined towards essential, it is very difficult at this point to predict the future market and produce accordingly. For finance relaxations, banks are offering moratorium periods so eventually the over interest that has to be paid is more and it’s not possible to cover all the monetary outgoings in the minimum business with is happening right now… If the industry doesn’t work at the fullest it may create losses and the cost of production might increase by 2 and half times.
We are hoping for an increase in demand during Diwali and the industry to function with full capacity by this year December.
- There were a lot of orders cancelled and postponed from buyers due to the pandemic. How did it affect your business and how are you coping with it?
Some manufacturers have purchased orders of yarns, and since there is no demand for fabric, the business is not in flow as it is supposed to be. This is the same case with not only yarn and fabric but the whole textile industry. There have been purchases that are cancelled, or postponed. And even if they are bought, they aren’t being manufactured into an end product. To top that, seasons have passed too and the pandemic has made people change their basic priorities, no one’s buying clothes now. This will result in losses, wither to the manufacturer or the buyer, anyhow, there will be a loss. Who will bear it, can’t be predicted as it will depend on the buyer-manufacturer relationship. During these trying times, I request the whole textile chain to hold each other’s hands and co-operate with each other. These difficult changes will probably lead to a better tomorrow.
- At this point, how hopeful is the scenario for the textile market?
Trade and trends are going to change, now the buying and selling will be virtual, more online transactions, more digital payments are expected. This is a new, and hopeful ray for better-enhanced business practices. Everyone equally lined up in the pandemic. It will affect every industry. We don’t know how much we will be damaged, we don’t know when buyers will buy or trade or when will we get back our payments. It is very uncertain. The risk-taking appetite has decreased. We have now stepped back at least 2 years in growth. The traders are at the biggest loss. In the new age after the pandemic, people will try to surface out of the losses and damages before venturing out into new horizons.
The youth essentially has to be prepared for challenges every step of the way. The companies might not hire employees for fixed payrolls but on a contract or freelance basis. It is required of us to reduce our luxury expenses and save the money for more ‘needs’ than ‘wants’. The manufacturers have to be very careful and alert of the market and try to avoid the sick unit situation. If such a situation arises, the collaterals will be sold at lower prices. It is not a shock that companies are giving out pink slips, alarmingly raising the unemployed population. This cannot be termed exactly as a loss to the country as our country has an immense number of opportunity seekers with innovative plans waiting to be manifested. When unemployment rises, self-employment also rises. One is required to stay hopeful and plan strategically for the future.
Interview taken by – Ms. Prachi Ghelot – Intern – TVC