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Price hike in raw material worries textile & garment industry
22
Jul '08
Increase in the prices of essential goods have impacted industrial growth since early July and a hike in cost of dress-making material in Ho Chi Minh City was only a natural consequence.

Prices soared some 15 to 30 percent higher than the previous month and mostly for imported materials from Korea, China and Hong Kong. Reasons have been attributed to high US dollar exchange rate and continuous increase in world oil and gasoline prices which have in turn amplified the cost of transportation.

Hike in prices varied depending on the type of material. While normal shrinking materials gained VND6,000 to 10,000 per meter to touch 15,000-70,000 per meter, Korean silk material is priced at VND150,000 per meter increasing by VND15,000.

On the other hand, prices for Khaki increased by VND8000 per meter to touch VND45,000 per meter. Besides, materials for suit trousers like plaid cloth, tussore cloth etc, saw prices standing at VND35,000-140,000 per meter going up averagely by VND10,000-25,000 per meter.

A closer analysis has shown that prices for almost all the categories increased by about 30 percent over last month. Each of the small traders in the city sell somewhere around 1,000-1,250 meters on an average in a month which got reduced to 900 meters per trader in July, representing a 20 percent decline in consumption compared to June.

Needless to say, increase in prices of cloth has impacted the business operation of small traders and garment companies alike. Garment products have now become more expensive as cost of input materials like cotton, fibre, and dye chemicals have soared by 30-40 percent.

As a result garment manufacturers have to increase the prices of the finished product as well which has not only weakened international competitiveness but also domestic demand, forcing many enterprises to close down.

However, the Association of Garment Textile Embroidery-Knitting has promised that in the future it will propose measures for stabilizing the exchange rate and find cheaper sources for importing materials for local production.


Fibre2fashion News Desk - Vietnam


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