Exporters from the knitwear hub of Tirupur are planning to increase prices by around 10 per cent against the backdrop of higher cost of raw materials, mainly cotton and other expenses. The price increase comes after nearly 5-6 years.
Industry representatives have said that they need to go for an at least 15 per cent price increase, but since competition is intensifying from Cambodia, Vietnam and other countries, they have decided to raise the prices by just 10 per cent.
The only saving grace is that with cotton rates increasing globally, some competitors are also planning to raise prices, though not to the extent of the exporters from Tirpur.
Exporters from Tirpur are already at a price disadvantage of around 10-12 per cent after drawbacks were withdrawan, said a leading trader.
Raja M Shanmugham, president, Tirupur Exporter Association, said that the decision to increase prices was taken after a series of discussions on raising cotton yarn prices, job working charges and accessories' prices, including other related expenses.
Shanmugham added that the continuation of the same prices would have certainly led to a difficult situation.
It was unanimously decided to ask the buyers for a 10 per cent increase while finalising new orders to compensate for the increase in prices.
The decision comes after costs went up in the entire supply chain starting from raw materials, including cotton, which rose nearly 10-12 per cent or Rs 24 a kg to Rs 250-260 a kg.
Dyers have also increased prices by around 15 per cent with effect from June as the cost of raw materials for dyes have gone up by 30-50 per cent.
Similarly, Tirupur Elastic Manufacturers and Traders Association, which is catering to these export units, has increased prices by 15 per cent after raw material prices rose by 10-25 per cent.
The Knit Cloth Manufactures Association told exporters that it would also be increasing prices.
Exports from Tirupur stood at Rs 240 billion in 2017-18 as against Rs 260 billion in 2016-17. Tirupur accounted for around 46.57 per cent of the total knitwear exports from India, which is estimated to be around Rs 515.26 billion in 2017-18.