A sharp rise has been witnessed in the bulk commodity prices on the global markets, since last eight months. Some of the people are holding factors like speculation ignited by the excess liquidity across the globe to be responsible for such abrupt rise in the prices of commodities ranging right from the sugar to wheat and corn to cotton.
However, even other factors like the climatic adversities in different parts of the world joined by heavy demand on the back of global economic revival, too, have played a part in instigating such abrupt rise in the prices of the commodities.
Sharp rise in the prices of cotton and synthetic fibres have even led to rise in the prices of ready-to-wear women's garments in the domestic Taiwanese markets. A rise of around five to eight percent has been registered in the retail prices of domestically produced apparels, while the prices of imported apparels have gone up by almost 12 percent on an average. Similarly, the cotton prices, too, have soared by 170 percent over the last seven months to touch a record high.
Further, in a bid to sustain market stability, the Ministry of Economic Affairs (MOEA), has been continuously holding meetings at an interval of every two weeks to review the prices of key day-to-day necessities in the local market, since last one year.
The Ministry, on February 15 for the first time ever has extended its review list to include key industrial materials.
Considering the recent dramatic variations in the cotton prices in the global market, the Ministry has resolved to restrict the textile material suppliers to one price adjustment per month.
Further, the Ministry of Economic Affairs even called upon 17 executives from the lower, middle and upper stream textile firms for a discussion session to formulate the strategies to tackle the soaring prices of the raw materials.
After the meeting, the Ministry stated that, the soaring cotton prices have set off the prices of domestically manufactured cotton yarns and man-made fibres.
Also that, no upstream manufacturer has yet been seen to have exceptionally hiked its yarn and fibre prices, but many of the downstream firms are facing difficulties in tackling the increasing raw material prices, since the last quarter of 2010, the Ministry said. However, it said that it will coordinate with the upstream textile manufacturers so as to guarantee adequate supply of raw materials to their buyers.
Further, the Ministry even proposes to bar the raw material suppliers from increasing the prices of their raw materials more than once a month. Also, if required it would on a case-by-case basis permit imports of textile raw materials from China, or may even temporarily ban exports of textile materials as per the currently prevailing Trade Act.
Presently, Taiwan still continues to import duties of four to seven percent on different textile items and the MOEA is likely to recommend the Ministry of Finance to reduce these import duties. Garment manufacturers are, however, of the opinion that price adjustments are essential to compensate for the hike in raw material costs as well as workers' wages.
Fibre2fashion News Desk - India
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