At a time when rising cotton prices coupled with soaring rupee value is threatening the bottomlines of textile companies, the Beijing Olympics comes as a breather.
With the Chinese government banning industrial activities in the vicinity of Beijing, several international buyers have started turning to India once again.
The number of export enquiries has risen significantly in the last couple of months. Surprisingly, these are coming from countries like Bangladesh, which traditionally used to buy from China. With the yuan appreciating, these buyers are now getting inquisitive about capitalising on the Indian industry,? said Rajiv Dayal, chief executive officer of Mafatlal Denim Ltd.
As a result, textile players expect a better realisation in the coming quarter. ?There has been a spurt in export orders in the past one month. If things continue, we will get a better realisation in the export market and the pressure on prices in the domestic market too will ease,? said a leading textile player, who has already hiked prices by Rs 4 per metre in the domestic market.
Hoping to see an increase in demand and a fall in over-supply, other players too are readying for a price hike.
?The industry is definitely set to witness a price hike in the coming days. We are just waiting for some more time to ease pressure on our squeezed margins. We intend to increase prices of our denim fabrics soon too,? said Deepak Chiripal, chief executive officer of Nandan Exim, the denim arm of Ahmedabad-based textile conglomerate Chiripal Group.
According to Chiripal, the industry may witness a price hike by at least 5 per cent in the near future.
Experts, on the other hand, feel most of the enquiries are low volume orders coming from boutiques and retail stores from these countries.
?Most of the enquiries that have started coming to India are of low volume but in large numbers. Europe, particularly France, has a high concentration in such low volume orders. Moreover, Sarkozy?s stance against Beijing Olympics has resulted in a public backlash against China and hence more enquiries have been diverted to India. Add to that, the Chinese currency has appreciated by 10 per cent and rumours are rife that there could be another 10 per cent appreciation in Yuan,? said Jagat Shah, chief executive officer of Ahmedabad-based Global Network, a trade consulting firm.
