“The raw material prices have increased so much that we cannot earn any profits from silk production. We had to stop the operation of some looms and ask employees to take days off from work,” he said.

The price of silk fiber has doubled to nearly VND700,000 a kilogram since the beginning of 2009, allowing him to keep only three out of his six looms in operation.

Chinh’s is not the only family in the village to feel the pinch. Nguyen Thi Ha, owner of Thu Ha silk shop, said she can only keep five out of her 14 weaving machines running.

“Raw material costs have seen sharp hikes but the price of raw silk has only risen to VND20,000 a meter from VND17,000 earlier,” she said. “At these prices, we can only earn enough to pay salaries and not make profits.”

The chairman of the Van Phuc Silk Weaving Cooperative, Nguyen Van Hung, said producers find it difficult to find customers if they increase prices by more than 20 percent. Besides, it is now winter, a time when silk products are not in much demand, he pointed out.

The weaving machines would go bust if they remain unused for a long time, artisan Chinh warned, adding it costs a lot of money to fix them.

Hung said the raw material prices are going up because of the shrinking of land under mulberry – on which silkworms breed – in some places like the districts of Dan Phuong and Hoai Duc in Hanoi and the provinces of Thai Binh, Ha Nam and Vinh Phuc.

Silk farmers here have changed their vocation since it has become unprofitable due to high input costs, he said, with some households even chopping down their mulberry trees to make way for brick kilns.

Silk producers in Van Phuc Village buy raw materials mainly from northern provinces of Vinh Phuc and Ha Nam, and Lam Dong Province in the Central Highlands or import them from South Korea and China.

Despite the high prices, the quality of the raw materials is not good this year due to unfavorable weather, Hung said. “This affects the quality of silk.”

“The number of silk production households in Van Phuc is now only around 200, compared to over 500 in 2005. Their production is expected to fall this year to 1.9-2 million meters from 2.5 million meters three years ago.”

Turnover is likely to fall 30 percent from last year to around VND40 billion (US$2.1 million), he said.

Until a few years ago production units in Van Phuc employed over 1,000 workers from the village and more than 500 from other places.

Difficult to meet demand for high-quality products

Hung said since demand for silk is still high, some shops in Van Phuc buy silk from other places like Lam Dong and Nam Dinh provinces and Hanoi’s Thuong Tin District to resell.

These products are more competitively priced because of their lower production costs, traders earn bigger profits from selling them, he said. But this would affect the Van Phuc brand name, he warned.

Besides the slumping domestic market, Van Phuc’s export markets are also drying up. Up to 70 percent of the village’s products are sold locally and the rest is exported or sold to foreign tourists. It receives 10,000-15,000 foreign tourists every year.

“We do not have the capital to improve technology or buy modern weaving machines and so it is difficult for us to meet the demand for higher quality or take on large contracts,” Hung said. “Many looms date back to the 1930s.”

He wanted the government to support Van Phuc in obtaining raw materials, land, and funding.

“To develop a traditional craft village in a stable manner, it is important to have a stable supply of raw materials. Agricultural agencies should support farmers with develop mulberry cultivation and silkworm breeding. It will help keep input costs stable and enable producers to sign large export contracts.”

(Source: ThanhNien)