Reduced credit limits hits textile markets

09 Oct '09

1 min read

The textile trading markets across the country are facing a credit crunch as payment periods for their purchases has slipped down from a high of 120 days to just 30 days in the last few months.

Many suppliers are also insisting on a cash only basis, which is adding to the woes of these traders. The festive season of Diwali is the traditional time, when nearly 25-30 percent of the overall yearly transactions are made.

The textile traders who dot in each and every nook and corner of the country conduct a huge volume of business in this period and this reduction in payment period is creating havoc with the businesses of the traders.

This has also affected the business of trader- exporters who depend on their suppliers to extend them extensive credit periods. Buyers from overseas markets, on the other hand extended their credit period, which literally sandwiches these middle-men.

The main reason for this jinx, say traders is the huge demand created in the market for fabrics and suppliers do not want to take the risk of supplying fabrics in huge volumes on long credit periods.

Fibre2fashion - News Desk, India

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