ABNORMAL INCREASE IN FABRIC AND YARN RATES
This spring, for the textile and apparel industry, it seems that does not mean spring flowers. Soaring prices of raw materials, workers hard to find these frequently seen in various media, keywords, has been troubled textile enterprises had weak nerves. But no matter the domestic market or international market, end-product price increases are not an easy task.
"From the end of last year to now, prices rose by 60% feathers, fabric prices rose by 40% and a market day, yet can not see to stop the rising trend."
The Indian garment manufacturing industry was having a splendid run with the country having shaken off the economic downturn. However the sudden increase in cotton prices in India is threatening to put a spanner in the works. In October 2009, a candy of cotton was priced around Rs 23,000 and by November 2010, it went up to Rs 47,000 a candy and has settled at Rs. 45,000 at the moment. This has directly affected cotton garment manufacturers who are reeling under this explosive price hike. And to make matters worse, there has been a shortage of raw materials as a result mills are facing a tough time purchasing cotton from the market.
In a bid to rectify the local situation, Confederation of Indian Textile Industry (CITI) feels that the government should seriously consider its recommendations and implement them as soon as possible. CITI’s recommendations include the government to restrict export to only 5.5 million bales this year; if any quantities out of the 5.5 million bales for which export contracts have been registered remain unshipped within the stipulated last date of December 15, 2010, these may not be allowed for shipment or fresh registration at least for the next two months by which time cotton arrivals in the market would pick up. Further, CITI also recommends that any further registration of cotton export contracts may be allowed only against Letters of Credit and that no controls are introduced on exports or prices of cotton yarn, in the long term interest of the entire textile value chain.
Though prices of all textile products have been increasing in both the domestic and global markets, there is normally a time lag between the price increases in raw materials and in finished goods.
SINCE MAY 2010 ABNORMAL INCREASE IN ALL KIND OF FABRIC RATES RANGING FROM 25 TO 50% HAVE RESULTED IN HIKE OF 20% TO 30% UPWARD TREND IN FINAL PRODUCT AS A APPAREL..TO OUR BEST KNOWLEDGE ,THIS IS THE MAX HIKE IN A DECADE WHICH IS UNHEALTHY & WILL RESULT IN THE CONSUMER FACING THE HEAT..ANY HIKE OF 25% AND ABOVE NEEDS TO BE CROSS CHECKED BY THE GOVERNMENT OR ANY RELATED TRADE AND INDUSTRY SOURCES WITH SUSPICION..WE NEED TO SAFEGUARD THE INTEREST OF THE COMMON PEOPLE & IN THE LONG RUN HIGHER PRICES WILL AFFECT THE BUSINESS AS WELL..INCREASE OF PRICES IN DENIM,COTTON.VISCOSE,HOSIERY & SYNTHETIC YARN CAN BE CROSS EXAMINED FROM OTHER SOURCES ALSO..GOVT HAS TAKEN SOME STEPS BY REDUCING THE EXPORT ETC BUT THEY ARE NOT SUFFICIENT ..THEY HAVE TO TAKE SOME CONCRETE STEPS.
Sajjan Raj Mehta
IPP..KARNATAKA HOSIERY & GARMENT ASSOCIATION