Those jeans could cost a little more

A rise in the cost of cotton, the key raw material, has forced denim producers to start increasing fabric prices.

For the last 2-3 years, denim producers here were consistently reducing prices.

Now, in view of the recent increase in cotton prices, they are looking at a hike of up to 10% in denim prices.

Standard denim, which has been quoting between Rs 85 and Rs 90 per metre, will now cost Rs 100 per metre.

Cotton prices have shot up by over 20% since the beginning of this crop season and denim producers see prices increasing 15% more in the next three months.

Aarvee Denim, the country’s second-largest denim producer with a capacity of 55 million metres per annum, has already increased fabric prices by around 4% and will hike it by another 5% soon.

“The demand for denim is rising and simultaneously cotton prices are also increasing. As we are seeing good growth in demand for fabric, we are not afraid of increasing its price. We have already increased

denim prices in December and further, looking at rise in
input (cotton) cost, we will have to increase soon,” Ashish
Shah, managing director of Aarvee Denims & Exports,
said.

Shah sees a hike of 9-10% in denim prices by the close of this fiscal.

Jindal Worldwide, which has capacity of 20 million metres per annum, is also planning to raise denim prices.

“Cotton prices are increasing steeply and so we are under pressure to up fabric prices. In this quarter, we will increase denim price by around 10%,” Vikram Oza, director - finance, Jindal Worldwide said.

Nandan Exim, a Chiripal group company, has a capacity of producing 30 million metres per annum. Deepak Chiripal, director, Nandan Exim, sees cotton prices increasing by another 15% in the next 3-4 months.

“We have already increased prices last month and now, looking at a further rise in cotton prices, we will have to increase denim prices further. The overall rise in fabric prices we expect is around 8% this fiscal,” said Chiripal.

Somewhat reassuringly for consumers, however, Arvind, the largest denim producer of the country with a capacity of 70 million metres per annum, is not in a hurry to hike prices. “We are expecting a huge rise in cotton prices and so we purchased the commodity in bulk last year. We have enough stock and so we don’t need to increase the price of the fabric,” Jayesh Shah, chief financial officer, Arvind Ltd said.