Woollen-Wear Mart Turns Hot As Yarn Prices Rise 60% in One Year.

AHMEDABAD | KOLKATA:Woollen clothes will become expensive by up to 30% thiswinter as woolyarn prices have risen by 60% in the last 12 months. India imports woollen yarn from Australia but supplies are falling due to a higher demand from China.

Foreseeing higher prices and a tepid offtake, some winter-wear producers are promoting blended woollen yarn. Kohinoor Woollen Mills managing partner Avnish Behal said: "Wool yarn prices have doubled in the last one year. This is putting pressure on our margins. Moreover, there is a resistance from consumers as well. Prices of woollen garments have gone up by 40% in the last one year. We have started to promote blended woollen fabric in a big way to tide over the situation." Companies like Raymond's have increased woollen-wear prices by 20% from July 1. A wool yarn trader said, "to cater to China's growing middle-class demand, Australian wool traders are largely selling to Chinese importers who are paying remunerative rates."

Ludhiana-based Monte Carlo, which has a share of over 60% in the premium woollen garments market in the country, has increased prices by 30% when pan-India booking for the upcoming season began three months ago. "We have to see how retailers and customers respond to the price hike. We had no other option as wool yarn prices increased by 60% to 70% in the past one year," said Sandeep Jain, executive director, Monte Carlo. He added that the company is not considering cheaper substitute acrylic at this stage.

Benchmark prices of wool in Australia have surged 39% this year, heading for the best annual gain in nine years. Prices touched A$14.31 a kg, the highest since at least July 1995. In South Africa, wool prices are at a high in more than a decade.

"While it is believed that the prices of wool would continue to move up, we expect that in another two or three months, when the new clip hits the market, there may be a stabilisation in prices. However, this is simply a speculation at this moment. We have to see how the market behaves in the coming months," Behal said.

Global wool output has fallen to the lowest level in about 85 years, with Australian production at similar lows, according to the International Wool Textile Organisation. Wool is catching up with rallies in other farm commodities from cotton to wheat and corn even as rising raw material costs stoke inflation worldwide.

Source : economictimes.indiatimes.com