Strange but true
Do we remember when was the last time that our industry did not face any challenge? I am sure most of you would vouch for my views that textile/apparel industry always have had some or the other disruptions like pandemic, labour, dyes and chemicals, power, wages, compliance, law, etc. This is an exhaustive list which makes us unsettled for any upcoming progress. However, our industry has the history and reputation of overcoming each of these challenges and rise victorious each time.
Glimpse of sunshine after some time
From last September onwards, be it domestic or international, buyers have started regaining the business momentum due to the fact the consumers begun their buying as they got little leverage from the pandemic. The apparel business got further support from a series of festivals being lined up. Due to this fact, the inventory levels of every buyer and fashion retailer started coming down and they started lifting the goods gradually from the vendors which were kept in hold in various stages of WIP (work in progress).
Apparel industry also started receiving new orders and everyone was positive with the market scenario.
Opportunity
As a country, we are still waiting for a market shift from China, whereas they have changed their market focus to technological and R&D development. They are catching up with the market in Europe, not in India. We aim to grab the Chinese cotton market which they are willing to give away and they are not focusing on spindle expansion. They are growing faster than usual on technology and not on production. We are 6 per cent of world textile export whereas China is 33 per cent in textile export. With this, we can understand what potential gain we can get if we grab this opportunity of cotton market.
New storm
While we started looking at the above as an opportunity, our industry got the next bouncer. I am sure all of you by now would have guessed it right. Yes, the new challenge which I am talking about here is the raw material price increase.
As a country, our strength lies in making goods from 100 per cent cotton. Our recent successful development is apparels made from regenerated cellulosic material viscose and its derivatives (like rayon, modal, Tencel). Global buyers and domestic apparel industry produce large quantity of apparels in India based out of cotton, rayon and polyester fabrics for their menswear, womenswear and kidswear requirement in terms of tops and bottoms.
Though we can produce apparels made from polyester and poly blends due to the recent consciousness of consumers and their awareness about circular fashion and sustainability initiatives, the consumption patterns have been lowered globally.
Market reality of textile/apparel industry due to yarn price increase
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Due to increase in yarn prices, fabric prices increased drastically
Woven- 15-20 Rs./mtr for top weight and 20-25 Rs./mtr for bottom weight and denim fabrics
Knits- 35 to 40 Rs./kg for top weight and 40 to 50 Rs./kg for bottom weight
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Fabric price reflects on garment price increase/piece starting from 15 Rs. to 30 Rs. per piece which is huge
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Mills are afraid to book any new orders due to present market scenario and price validity offered by mills is not more than 2 days
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Non mill sector vendors are not able to get the yarn deliveries promptly which is forcing them to stop taking any new orders
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Textile/apparel manufacturing people’s sustenance will be under question mark again
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Uncertainty over maintaining the prices of the enquiries being floated last week over this week as raw material prices keep changing within month
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Meeting required delivery timelines as per buyer requirement is difficult
With such a steep increase in price month after month causing major disruption in Indian textile/apparel industry, be it export order or domestic requirement, mills and vendors are unable to fulfil their buyer requirements in terms of price and meet their delivery time lines as the timely deliveries are not assured and guaranteed by spinners, grey fabric suppliers, though mills and vendors are willing to pay the price as per mills requirement in order to service the orders which are in hand. There is good amount of uncertainty on how the market is going to behave further and how long this upward trend will continue.
Consumer mindset after pandemic
As we all know that post-pandemic, customers’ buying abilities have been dramatically reduced and they are very cautious in spending. Also, they have started expecting gold at silver rate now, so the price revision by any buyers due to raw material price increase is not going to be greatly supported or entertained by consumers.
So it is highly imperative to address the above issue on war foot basis, else international buyers will be forced to start looking at other countries or sourcing hubs to fulfil their apparel needs in terms of price and OTIF (ON TIME IN FULL) and domestic buyers will be forced to look for import as an option to fulfil their merchandise needs as they do not have any room for increase in their selling prices due to shift in consumer mindset. It will disrupt the apparel industry in a very big way and affect our countries economy, growth and GDP.
Our recent thoughts of ‘Vocal for Local’ and ‘Make in India’ which gained great momentum during this pandemic period will get subdued gradually if the above is not addressed on an immediate basis.
Need of the hour
In order to sustain and grab the opportunities lying for apparel/textile industry, people involved in the entire eco system need to cohesively look for solutions to address the new storm of raw material price increase and availability with the help of the Government, Ministry of Textiles on an immediate basis.
New year brings good amount of hope and positivity in every aspect. Let’s hope that the above challenge on raw material price increase and shortage of supply gets addressed quickly and our apparel/textile industry grows bigger and stronger in coming days.
Source : https://in.apparelresources.com/