The Hindu : Tamil Nadu News : Inflation spins into textile products

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Monday, Aug 04, 2008
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Tamil Nadu

Tamil Nadu

Inflation spins into textile products

The rates of textile products have gone up across varieties resulting in a not very buoyant business for all. However, with the festival season approaching, the manufacturers and traders hope to see business picking up soon, writes M. Soundariya Preetha

Photo: M. Balaji

INFLATION IMPACT: The price of hosiery products made in Tirupur has increased. —

In line with the general trend of price rise, textile products are also turning expensive. The rates have gone up across varieties resulting in a not very buoyant business for all.

Known across the country as a textile manufacturing hub, Coimbatore has thousands of units that make goods such as hosiery, lungi and sarees.

On the trading front, the city has nearly 2,000 textile outlets, in both wholesale and retail, that cater to the demands of local population and those coming from the nearby towns.

P. Durairaj, secretary of the Coimbatore Cloth Merchants’ Association and R. Murali, joint secretary of the association, say that on an average, prices of textile goods have gone up by five per cent in the last few months. For pure cotton products, it is even 10 per cent.

Traders here purchase from Mumbai, Surat, Kanchipuram and Rajasthan apart from the manufacturing units in the region. Thus, transportation cost adds up to the prices of the goods. “With the general trend of price increase, it looks like people do not feel the hike in rates of textile products very high,” they say.

Competition

However, Coimbatore is a place of stiff competition for those into textile trade. With the wide range of varieties and options available, textile goods do not have a uniform pricing. Hence, for a number of products the prices can vary from shop-to-shop. Further, the traders always have some stock and hence the hike in manufacturing cost reflects at the retail level only gradually, they say.

Traders feel that the prices can go up further in the future, depending on various factors. However, even if it does, it will be gradual.

Meanwhile, with the raw material prices shooting up in the last few months, textile manufacturers are seeing the production costs going up.

According to a representative of the South India Hosiery Manufacturers Association in Tirupur, companies have increased the selling rate of hosiery products by 20 per cent in the last three or four months.

The cost of raw materials (mainly cotton), processing, fabrication and stitching have all gone up by 15 to 20 per cent, thus putting the pressure on the selling price. However, sales continue since hosiery goods are basic wear. Tirupur produces hosiery products worth over Rs. 2,000 crore annually for the domestic market.

D. Gandhi, a textile trader and weaver in Erode, says the production cost has gone up from raw materials to the entire process.

Thus, the average wholesale price for a Rs. 12 towel is now Rs. 14. If a lungi used to cost Rs. 40 in the wholesale market, it is now Rs. 42 or Rs. 43 a piece. “The selling rates are going up gradually and not to the extent of the production cost,” he says.

Those who used to sell to the traders for credit now prefer cash purchase. With these factors, business is dull, he says.

However, with the festival season approaching, the manufacturers and traders hope to see business picking up soon.

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