Unable to absorb the astronomical rise in raw cotton prices, major readymade garment brands have decided to pass on the additional input cost burden to customers, hiking the rates for their cotton- based apparel by 10-20 per cent.
"Yes, we have decided to increase rates of our garments in the range of 15 to 20 per cent in view of rising prices of raw cotton," said Sandeep Jain, the Executive Director of Ludhiana-based Oswal Woollen Mills. Oswal Woollen Mills owns premium garment brand 'Montecarlo', which is available at 110 exclusive outlets in the country.
Echoing a similar sentiment, the Duke Group, famous for its t-shirts, will also increase the rates for its garments by 10 per cent. "It is now hard to absorb the rates of cotton, which have scaled new heights. That is why we will be increasing prices of our garments by 10 per cent across our range," Duke Group Chairman Komal Jain said.
Another readymade garment brand, UV&W, owned by Venus Garments, will also raise the prices of its apparel by 15 per cent on account of rising cotton rates.
Companies have already effected a 15-20 per cent rate hike in new orders for a range of garments, including shirts, trousers, t-shirts, denims and sweatshirts for men and women. "We have raised our booking rates for new orders to make garments," said Jain.
According to traders, cotton rates are presently hovering at around Rs 3,600 per maund (approximately 37.324 kg) to Rs 3,700 per maund, which is way more than the rate of Rs 2,400 per maund prevailing in the corresponding period last year. The upward spiral in cotton prices has also impacted cotton yarn rates, with spinning companies raising the price of 30 combed cotton yarn from Rs 180 a kg to Rs 190 a kg.
Readymade garment-makers in the North are among the biggest consumers of cotton in the country. The total cotton requirement of the sector in Punjab and Haryana is pegged at 55 lakh bales of cotton per annum.
Chastising the Centre's move to permit cotton exports, garment-makers questioned the "urgency" to allow the overseas shipment of 55 lakh bales of cotton. "What was the urgency in going ahead with cotton exports even at a time when cotton prices have been rising in the domestic market," asked Nahar Spinning Mills MD Dinesh Oswal.
"We are unable to get raw cotton in the market as traders have created an artificial shortage," he said.