Steady Development Of India Denim Industry

India denim industry has the ability to face the storm of raw cotton prices and the subsequent price volatility. Because of improving the product structure and increasing the utilization rate of the capacity, it is possible for the denim manufacturing industry to acquire this capability.

However, the continued rise in retail prices may undermine the production of India denim producers.

"Look at the magnitude of the sharp decline in raw material prices, for example, in recent weeks. Cotton price In the future, denim prices will drop and prices will slow down. We think there is no problem in price and supply, "said Mr. Utsav Pandwar, chief financial officer of Aarvee denim and export limited company.

　　 Mafatlal denim The company's Mr Rajiv Dayal said: " Fabric Demand has not slowed down, but retail sales have slowed down. Denim fabric production company supplies fabrics for India brand and garment exporters, and they export fabrics themselves. If retail profits fall, denim fabric manufacturers will focus on exporting because the global market is very large.

"The annual market size of India denim is only 6-6.5 billion, but the global market size is 5 billion meters a year. Therefore, they also export fabrics. It's hard to find out exactly what happened between retail and fabric production in India.

"In the India 650 million meter denim fabric market, the domestic market is only 400 million meters, and exports to 2-2.5 billion meters. Therefore, the export elements are quite large, because India denim manufacturers also have the ability to participate in global competition.

Retail prices will continue to rise, profits will shrink and development will be blocked. Mr Dayal said the market was volatile, and profit margins were shrinking because cotton prices were also falling. This is a comprehensive factor.

"Last year's situation was different, cotton prices rose, and then sales prices also rose. On the contrary, people are concerned about the quantity and the price of cotton has fallen. Therefore, it is not that profits are affected, but that there are too many factors involved. "

He explained further: "there are basically two levels. Fabric and clothing and retailing. They are separate. The development of denim business depends on cotton price, practicality, supply and demand. Second, what is happening in the retail industry, or what is happening in the brand, and the profitability of the brand clothing companies and retailers.

Despite the challenges, Mr Pandwar expects that the performance of denim will be satisfactory in the current fiscal year, except for the first quarter. The high cost of cotton inventory in the first quarter will affect the performance of denim enterprises.