The textile market place is trade oriented and governed by many factors in
multiple complex combinations; today we will address “Yarn Price” one of the
important factors that governs the textile business in the market.
The study of yarn price in relation to the yarn number is called “Yarn Price Index”,
and in yarn number division as price per count, price per denier, price per tex.
Example: 20’s Cotton Count sold at Rs.120 per kg will have its relative price
index of Rs.6 per count and if sold at Rs.300 per 5 kg than the yarn will have
price index of Rs.3 per count. Like wise for Denier and Tex count as well.
The study of fabric price in relation to the GSM is more conclusive than for thread
count as informative. The Clothing industry in relations to number of operations
in accordance with price per operation in apparel making gives its price index.
Textile market has critical price concern, as the cost of fabric produced will be
bearing 25% to 60% as yarn cost depending up on the origin and fabric variety.
The same is the case with Clothing industry were fabric cost bears 40% to 75% of
the garment or Apparel price. As the yarn cost bears major part of fabric cost, the
increase in price affects the critical parts of business health and decides the
future of T&C business from start of textile product cycle to end of product
demand in the market. The price not only affects the regional market place and
its future, but also affects the domestic and international market trade.
The textile market competes based on yarn price through its textile products for
its survival in local market, domestic market and international market. The
countries with lower “Yarn price Index” gets major market demand and export
orders even if the country is under developed or developing country, and India
being example of the textile trade from many centuries evident from names given
to the trade routes like “Silk route” given by textile fiber.
The survival of local and domestic textile industry some times demands trade
restrictions by the countries trade policy makers to impose anti-dumping duties,
quotas to banning the imports which can be evident from full Cotton banned in
1686 in France, in 1721 in England, when East India Company imported 15
million yards per annum of Cotton textiles between 1670 and 1760, to recent
example in India being government very recently increase in import duty from
10% to 20% for Chinese textile to India to provide cover to synthetic textile
domestic industry of Surat.
In the recent past India has seen the textile and Clothing both trades shifting to
neighboring Asian counties like Bangladesh, Indonesia, and Vietnam with big
brands investing in to countries looking at “Price Index”, Indian textile and
Clothing Industry with sound educations and R&D Institution back ground the
business flowing and flourishing out side India has raised concern about future of
domestic and export market for Indian textile and Clothing industry. The same is
the case with textile and clothing machinery manufacturing industry struggling for
its recovery to regain its glory.
The price of yarn in tern feeds the entire textile and clothing value chain from
value proposition for investor to customer loyalty program, and in best and worst
case results in to healthy leading industry to sick and obsolete death. The
encouragement to revival strategy for T&C industry depends upon the viewing
angle and side represented by industry stack holders, key roll played by price and
cost management decides the out come from the industry.
In present the T&C industry face tuff competition from Chinese import, in spite of
the transportation cost from China to India, the price offered by Chinese textile
and Apparels are in many case at par to raw material cost in India, there by
putting serious threat to T&C industry and to synthetic T&C sector in particular as
Cotton exported to China and there after T&C goods made out of Cotton can not
compete the India due to “Price Index” in Cotton sector, still mass scale Chinese
industrialization and Chinese Government under next five year plan approving
promotion of “IP, Innovations and Research & Development” under
implementation in to grass root level puts big question mark to Indian T&C
industry were survival is the present industry agenda and R&D sector institutional
research is Government of India contribution to the industry.
Other side Chinese export is about eight times the Indian exports being at 5% of
the World total textile export. The big volume importing brands from west are
squeezing the price of there products to practically un-imaginable level and
demanding further decline in price point for T&C products. The 100% Polyester
finished dyed fabric with surface finish for Apparel made in Indonesia at 60 cents
per linear meter with big volume business demands, same is asked to supply at
40 cents from India without compromising on fabric quality parameters. The
same big volume is demanded at reduction of 5-6 cents per annum with ever
increase in volumes. The price rise in synthetic T&C sector makes the sector to
loss the market share to Chinese exports internationally and to domestic Chinese
import, and makes Indian T&C sector un-fit for export unless until the middle
business structure gets resized and restructured under Squeezes from both side.
The Cotton textile and Clothing industry on other hand loosing its business to big
volume buyers as they centering their supplies from neighboring countries and
thus concentration on only non-bulk business with price benefits, and smaller
volumes. The T&C industry in cotton sector is diversified and clustered which on
one hand gives flexibility and on other hand restricting to big volume business
with consistent quality offered by Chinese T&C industry at higher price.
India in spite of Major Cotton growing country losing stacks as major T&C
business to China, Bangladesh by the way of strategic restructuring of T&C and
business model for markets across the world.
In contrast the geographic and wide cultural needs provide much needed price
realization to make it survive through non-regular fabric varieties with range of
price and profit margins and perform better than domestic industry average to
exports. The new applications of T&C sector provides aver increasing fresh breeze
to breath through heavy competitions.
The modern high speed and productivity machinery offering on one hand lower
price index and mass production, on other hand simplified product manufacturing
taking away price points as plain products. Availability of open space for complex
and specialized textile and clothing products offer opportunities to expand their
business prospects and grow with the demands.
Innovations and Creative skills is yet to be recognized for price reduction and
Intellectual Property (IP) for bringing edge of competitiveness lacks both
awareness and focus by the T&C sector as well as textile machinery industry
sector. Unless until stack holders realizes there losing stacks and concludes to
their lost identity & disadvantages to modernized industrial sector encompassing
from west, the way ahead will be lost and late running. As IP Patent filing from
the developing countries is staidly increasing with available open space for new
innovative ideas and break through technologies from West and East-Asian
countries in comparisons IP awareness in Indian T&C, machinery sector is hard to
find and discoveries loss their IP on brink of startup.
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