Prices of cotton products go north

Coimbatore: The unprecedented hike in cotton and yarn prices has had a cascading effect, spiking the cost of retail products made of cotton.
A lungi, which used to cost 150, now costs up to 250, while a Turkish towel that used to be sold for 150 -170 a year ago is priced at 250 to 300 in the retail market. Price of other cotton products, right from saris to bedspreads, have seen the snowballing effect, burning a deep hole in customers’ pocket.
“The end result is that there is a fall in sales,” says T R Sivaram, managing director of Classic Polo brand of T-shirts. The cost of Classic Polo T-shirts, positioned in the premium range, had to be increased from the 1,000-1,300 range to 1,400, Sivaram says.
Retailers initially absorbed the price hike by foregoing profits. That was because sales were just picking up soon after the trade blow suffered due to the Covid lockdown. “But we could no longer take the price hike. We had no choice but to transfer the increase to the customers,” says P Mohansundaram, who runs a mid-sized showroom in Coimbatore. “Saris, which we were procuring from Sirumugai and selling for 1,100, is being sold for 1,600 now,’’ he said. “Overall, there is a 40% increase in retail prices on all products made from cotton.”
President of Erode Cotton Cloth Merchants Associations K Kalaiselvan said the prices went north not only because of cotton price rise. “Other raw materials like dyes are also expensive. For instance, cardboard used for packing became costlier by 30%. Fuel price rise made a further dent.”
Sivaram said that Classic Polo used to do sell two lakh T-shirts a month. ``Now, there is a 10 to 12 % dip.”
Traders of mid and low-range brands are the worst-hit, as they cater to customers, who are price-sensitive. “There is a 40% drop in sales due to price hike,” he said, adding that the negative trend would continue for a few months, until the festive season arrives.
Traders feel that if cotton prices do not subside in the coming months, there would be another round of spike in retail prices.