Ahmedabad: Russian Invasion Ukraine The sharpest global inflation in decades is fueling a breakout, putting tremendous pressure on trade and Industries in Gujarat,
Even as production is disrupted due to supply chain issues due to the Covid-19 crisis, manufacturers and developers are feeling the weight of the economic impact of the conflict due to the rise in oil and gas prices. This in turn has raised shipping and logistics costs. , This, coupled with shooting up prices of raw materials, is adversely affecting the cost of production. Many sectors are facing cancellation of orders or reduction in new order volume, forcing units to cut production or put workers on standby.
Dyes, chemicals order impact
Gujarat is one of the leading exporters of dyes, intermediates, organic and inorganic chemicals to Russia. Soon after the Russia-Ukraine conflict escalated, not only were shipments delayed but new orders began to be affected as well.
Bhupendra Patel, Chairman, Gujarat Region, Chemexcil, said, “For the last 10 days orders have stopped coming, which is a copy of the bearish trend. This will have an adverse effect on revenue. It will be a double whammy for the industry players already battling due to spurt in raw material prices. ,
Over the past week, the price of Indonesian coal has risen as a result of the Russo-Ukraine war. This has increased cost pressure for dyes and chemical manufacturers as coal is widely used to operate boilers. “Demand in the textile sector has also weakened due to the rise in cotton prices. Due to this the textile processing houses are not working and placing fresh orders for dyes and chemicals. ,
Rising production costs result in fewer engineering units used
Rising prices of pig iron, an essential raw material for most engineering goods, are turning out to be a curse for most units, reducing manufacturing capacity. The cost of pig iron increased by 25% from Rs 57,820 per tonne in February, raising the cost of production.
“At present, there is a 20% drop in production and if the prices are not dealt with by raising the prices, the units may face shutdown in the coming days. Rising demand for Indian steel amid the Russia-Ukraine crisis has led to a dramatic rise in prices. The price of coal, the major raw material for making cast iron, has risen. Industry players will have no option but to cut down on the days of operation,” said Brijesh Dudhagra, a Rajkot-based engineering goods manufacturer.
Rise in gold prices, work of jewelery units stalled
Earlier this week, gold prices in Gujarat dramatically touched an 18-month high to Rs 55,000. Due to this, jewelery shops are lying deserted and investors have been stirred up. As a result, jewelery manufacturing units have been left without work, affecting employment.
“The price of gold in the international market increased from $1,850 (approximately Rs 1.4 lakh) to $2,070 (approximately Rs 1.6 lakh) per ounce. In view of the rally, the yellow metal rose in the domestic market. While this is preventing jewelers and stockists from investing in gold till the price stabilizes, the retail counters are also deprived of customers. “As a result, many jewelery making units are not getting any orders. Due to Holi festival and lack of work, jewelery artisans have left for their home states and this is affecting revenue,” said India Bullion and Jewelers Association (IBJA) director Haresh Acharya.
Even as production is disrupted due to supply chain issues due to the Covid-19 crisis, manufacturers and developers are feeling the weight of the economic impact of the conflict due to the rise in oil and gas prices. This in turn has raised shipping and logistics costs. , This, coupled with shooting up prices of raw materials, is adversely affecting the cost of production. Many sectors are facing cancellation of orders or reduction in new order volume, forcing units to cut production or put workers on standby.
Dyes, chemicals order impact
Gujarat is one of the leading exporters of dyes, intermediates, organic and inorganic chemicals to Russia. Soon after the Russia-Ukraine conflict escalated, not only were shipments delayed but new orders began to be affected as well.
Bhupendra Patel, Chairman, Gujarat Region, Chemexcil, said, “For the last 10 days orders have stopped coming, which is a copy of the bearish trend. This will have an adverse effect on revenue. It will be a double whammy for the industry players already battling due to spurt in raw material prices. ,
Over the past week, the price of Indonesian coal has risen as a result of the Russo-Ukraine war. This has increased cost pressure for dyes and chemical manufacturers as coal is widely used to operate boilers. “Demand in the textile sector has also weakened due to the rise in cotton prices. Due to this the textile processing houses are not working and placing fresh orders for dyes and chemicals. ,
Rising production costs result in fewer engineering units used
Rising prices of pig iron, an essential raw material for most engineering goods, are turning out to be a curse for most units, reducing manufacturing capacity. The cost of pig iron increased by 25% from Rs 57,820 per tonne in February, raising the cost of production.
“At present, there is a 20% drop in production and if the prices are not dealt with by raising the prices, the units may face shutdown in the coming days. Rising demand for Indian steel amid the Russia-Ukraine crisis has led to a dramatic rise in prices. The price of coal, the major raw material for making cast iron, has risen. Industry players will have no option but to cut down on the days of operation,” said Brijesh Dudhagra, a Rajkot-based engineering goods manufacturer.
Rise in gold prices, work of jewelery units stalled
Earlier this week, gold prices in Gujarat dramatically touched an 18-month high to Rs 55,000. Due to this, jewelery shops are lying deserted and investors have been stirred up. As a result, jewelery manufacturing units have been left without work, affecting employment.
“The price of gold in the international market increased from $1,850 (approximately Rs 1.4 lakh) to $2,070 (approximately Rs 1.6 lakh) per ounce. In view of the rally, the yellow metal rose in the domestic market. While this is preventing jewelers and stockists from investing in gold till the price stabilizes, the retail counters are also deprived of customers. “As a result, many jewelery making units are not getting any orders. Due to Holi festival and lack of work, jewelery artisans have left for their home states and this is affecting revenue,” said India Bullion and Jewelers Association (IBJA) director Haresh Acharya.