Gujarat: Cotton price surge hits output in denim capital

rawan239

2 years ago

Surging prices of and other raw materials have left denim manufacturers inGujarat the countrys denim capital grappling with a spike in production costs to the tune of 30%. With costlier raw materials and availability issues, denim production has declined by at least 30% over the past six months. This has left denim mills operating at an estimated 70% capacity utilisation, suggest Industry estimates.

Raw cotton prices rose from Rs 36,000

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per candy in September 2020 to Rs 78,000 per candy in February 2022 over a span of 16 months adding to the Stress of the denim manufacturers. Industry estimates suggest that denim makers contribute at least 10% to the total cotton consumption in India.

Industry experts claim that the worst affected are mills that have recently entered the denim business, as they are faced with a dual hit of not being able to pass on cost escalation to the market and repaying debts.