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Despite cheaper cotton, denim makers to not cut prices

04 May '11
2 min read

Denim fabric producers had hiked their prices by almost 30 percent, due to the almost doubling of cotton prices in the last one year. However, cotton prices have fallen by around 22 percent in the last one month. But denim producers do not intend to lower their prices, atleast not immediately.

Shankar-6 raw cotton prices which were quoting at Rs 61375 per candy on April 3 were quoted at Rs 47,625 per candy on May 3, down 22.40 percent.

“The main reason for denim producers not being able to reduce prices is because currently we are consuming cotton bought at a higher price two months back. If the median price will sustain for another one month, then we may mull reducing the price”, Mr Utsav Pandwar, CFO - Aarvee Denims told fibre2fashion.

Ms Revati Kasture, Head – Industry Research, Care Ratings said, “Care does not foresee any likelihood of prices moving up from here as the cotton prices have eased a bit from its highs in the last month or so. At the same time, the companies are not looking to reduce prices in the near future as demand scenario is appearing favorable at this stage”.

Elaborating further, Mr Pandwar said, “Denim prices have witnessed an uptrend during FY'10 as well as during FY'11, primarily driven by the rise in prices of cotton which the denim manufacturers have been able to pass on to the customers.

“Denim fabric price realizations averaged in the range of Rs 110-150 per meter during FY'11. Presently, the denim fabric is selling at an average rate of Rs 130-170 per meter in the domestic market and around Rs 180 per meter in the export market”, he wrapped up by saying.

Fibre2fashion News Desk

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