Shirting traders in Ahmedabad shorten credit period

Greater working capital requirements and proliferation of fraud have changed the credit system in the textile trade in recent days. 

Shirting suppliers in Ahmedabad have set new rules to avoid losses when raw material prices are at record highs.

Ahmedabad Shirting Association president Pradip Shah said, "We recently held a meeting to discuss the trade situation. High cotton prices have affected our trade and prices have risen by around 40% from last year. Our working capital requirements have increased. We have also witnessed many cases of fraud, where unscrupulous elements buy fa bric from traders and cheat them. We have now directed all the members to follow a credit limit of 90 days instead of 150 days. We have also asked traders to check the full background of buyers before supplying fabric to mitigate fraud. "

 He said that fabric supply is short in the market because spinning mills have stopped productio n in South India and weaving units are now supplying stock only with spot payments.

Fabric traders are thus facing working capital problems.