Silk industry facing crisis, says federation

By Our Staff Reporter

BANGALORE, MAY 24. After raw silk, it is now silk waste which is threatening the health of the silk industry. The Indian Spun Silk Mills Federation says the industry is facing a crisis due to non- availability of silk waste.

Silk waste, a by-product generated in silk reeling, is the basic raw material in the production of spun silk yarn used in the silk carpet industry in Kashmir, and other yarn with specific end use.

There are 17 spun-silk mills in the country, of which four are export-oriented units (EOU), while the Karnataka Silk Industries Corporation (KSIC)'s Channapatna unit is a licence-holder supplying silk waste at reasonable prices. As many as 12 units have closed down.

Mr S. Muniraju, former Silk Board chairman, and the KSIC Managing Director, Mr S.L.Gangadharappa, say the domestic demand for silk waste is 8,000 tonnes, and the 17 units, most of which are working at under-capacity levels, produce only 4,500 tonnes of yarn. Which means that the units under operation are working with a capacity utilisation of a mere 20 per cent.

The irony, it appears, is that the export of silk waste, which was earlier banned, or exported under several restrictions, has been taking place freely since 1994. In 1997, China, which enjoys a monopoly in silk, including spun-silk yarn, imported abnormal quantities of spun yarn, and paid an inordinately high price for it. China itself banned the export of silk waste 10 years ago.

The spun-silk industry is keen that the trade should not go the raw silk way, which saw China purchase raw silk from India at high prices, forcing the Indian silk industry to buy the silk yarn dumped on them when they went into distress mode at the price dictated by China.

The Silk waste price thus suddenly shot up sharply from Rs. 100 per kg to Rs. 300. Export of the raw material also rose to nearly 1,600 tonnes in 1997-98, leaving the domestic industry starved of it. The industry has since been demanding a ban on the exports of silk waste.

The Indian Spun Silk Mills Association says that the worst hit are the EOUs which were exporting yarn to Europe, apart from the carpet industry in Kashmir which is totally dependent on yarn from Karnataka.

Mr. Gangadharappa observes that the loss in foreign exchange earnings due to export of raw material is substantial. "We must be the only country that chooses to export raw material and lose money rather than increase earning by exporting value-added products," he says.

The loss in earnings on spun silk over five years was Rs. 107.5 crores, while export of raw material caused the carpet industry a loss of Rs. 322 crores over five years.

Apart from this, the 10,000 employees at the mills, and 70,000 dependent on it indirectly are now left without a livelihood. Kashmir, which has over 15 lakh people engaged in the carpet trade, has been tottering under the shortage, and asked the Union Government to allow import of silk waste.

The yarn industry squarely blames the greed of the traders for the situation. And there appears to be no light at the end of the tunnel for the time being. Even the offer to purchase silk waste at the prices which exports will earn, has found no takers in the export fraternity.

Following an appeal from the industry three months ago, the Chief Minister, Mr S.M.Krishna, wrote to the Union Textiles Minister, Mr Kanshi Ram Rana, urging him to ban the export of silk waste. The ministry's response was that there was no shortage, and it was the surplus quantity that was being exported to help the cocoon-growing farmers.

The association hopes that better sense will prevail, and they will not be forced to seek the intervention of the courts.

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