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Textile producers unable to pass on cost hikes
24
Sep '10
The country's textile producers are in a fix, as on one hand, the rising prices of cotton, the basic raw material for many companies in India, are registering new highs, creating margin pressures in the process.

Consumers on the other hand, are strongly opposed to any sort of rise in the prices of final products. Most of the producers have been forced to absorb a price rise of around 15-20 percent, but have been able to pass on very little of the cost increases, to the end-consumers.

Cotton prices, over the last two months, have gone up by almost 36 percent to set new records at Rs 38,500 per candy (1 candy=356 kg).

This rise in prices is mainly because of short supply of commodity in domestic markets coupled with a flare-up in world markets, due to the increase in demand from the world's biggest consumer, China.

According to industry experts, the rising prices may adversely affect the textile sector. Also they apprehend that cotton prices may maintain these high levels or increase further in the next season also.

Fibre2fashion News Desk - India

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