The rise in prices of imported raw materials has increased the prices of dyes made by for Gujarat-based dye-makers by about 15 to 50 per cent in one month, which industry representatives fear can reduce market demand. A mishap in a factory in China, making raw materials, has disrupted production reducing the availability in India.
Yogesh Parikh, president of Gujarat Dye-stuff Manufacturers Association (GDMA) said that price of H-Acid has risen from Rs 400 per kg to Rs 500 per kg. Similarly, price of chlorosulfuric acid has risen from Rs 12 to Rs 19 per kg, Meta Diphenyl Amine (MPD) has more than doubled from Rs 400 per kg to about Rs 1,100 per kg. "This has increased the price of our dyes by about 25 per cent. It affects our sales in the export market," said Parikh. More than the rise, the uncertainty in price (in terms of fluctuations) brings uncertainty in deal-making. Moreover, Rise in price also reduces the demand in the domestic market, particularly when the economy is passing through a phase of slowdown.
Industry sources said that about a month ago, a there was a major fire in one of the factories in China, that supplies intermediate products to Indian manufacturers of dyes. The fire has disrupted the supply for Indian manufacturers. "More than 40 persons had died in the fire. The Chinese government had then cracked down on companies violating regulations. This has reduced production in China and consequently the supply of chemicals used by Indian companies," said Bhupendra Patel, chairman of Chemical Export Promotion Council (CHEMIXIL) in Gujarat.
He told DNA that the shortage of supply and the consequent increase in the price of raw materials forced them to increase their products' price. "Price of different products has risen by 15-50 per cent. We can delay the purchase by a couple of weeks. But we can't defer the production on an indefinite basis. We are also forced to increase the price of our products," he said.
Weakening of rupee against the US dollar has given businessmen some breathing space in the export market. The rupee has depreciated from 69 per dollar to about 70.5 per US dollar