Garment manufacturers in Gujarat have predicted a rise of 10 per cent in the price of garments after the Central government raised the Minimum Support Price (MSP) of cotton.
Garment manufacturers in Gujarat have predicted a rise of 10 per cent in the price of garments after the Central government raised the Minimum Support Price (MSP) of cotton. The central government raised the MSP on medium-staple and long-staple fiber cotton by 28 per cent and 26 per cent, respectively. The MSP of cotton (medium staple) was raised to Rs 5,150 per quintal from Rs 4020 per quintal and that of cotton (long staple) to Rs 5,450 per quintal from Rs 4,320 per quintal.
“The increase in MSP will have a big impact on the prices of garments. In the run up to the upcoming festive season that extends till Diwali, we foresee a 8-10 per cent rise in cost of garments,” said Vijay Purohit, president of Gujarat Garment Manufacturers Association (GGMA), a body that manages 5,000 garment units in the state.
“We source most of our raw materials cotton fabric from Gujarat. We have also started sourcing from Karnataka,” Purohit said. The manufacturing units under GGMA mostly produce cotton garments for men. According members of GGMA, even the larger cotton processing units who will have stocked up low price cotton will tend to increase the prices of their produce, which in turn will be passed on to the customers at the end of the value chain. “The effect on the price rise will be felt from end of August,” he remarked.
The selling rate of cotton shirts manufactured in Ahmedabad currently ranges between Rs 150-550 for a single piece in the wholesale market. Similarly, the prices of cotton pants produced by the garment manufacturers is about Rs 350-650, while that of denim is between Rs 450-900.
“The garments produced here are among the cheapest in India… The rest of the cost that you see on the price tag in retail outlets is the cost of marketing and brand,” Purohit said. In Gujarat, where cotton crop commands the maximum acreage, this year is expected to be no different. In 2018 Kharif season, farmers in Gujarat are expected to sow more cotton than last year.
Though the sowing has just begun due to delayed onset of monsoon, farmers in the state have already sown cotton crop on 17.22 lakh hectares which is almost 71 per cent more, compared to last year.