Global apparel brands are negotiating hard with Indian exporters as cotton prices have fallen 15% and rupee has depreciated against the dollar favouring the latter. They have asked Indian apparel exporters to supply garments at the pre-covid level prices.
The impending recessionary pressure in the US and Europe are forcing global brands to negotiate hard with Indian exporters, who have now started looking at other countries like Japan, Australia and Latin America for developing new markets for Indian apparels.
“Cotton prices have dropped by 15% from the high of Rs 1 lakh per candy (356 kg). It will fall further in the coming weeks,” said Narendra Goenka, chairman, Apparel Export Promotion Council (AEPC).
But the drop in cotton prices have prompted global brands to initiate hard negotiation in the price front. Raja M Shanmugham, president, Tirupur Exporters Association (TEA) said “Global buyers now want garments at the pre-covid prices. For instance, the price of a product which we have sold at $7 this year due to high cotton prices, they are now asking to offer it at $5 – the price at which we had sold in pre-covid times.”
Since rupee has depreciated against dollar, foreign buyers are driving hard bargains to lower the prices of garments. On account of rising dollar index and economic worries, rupee weakened to a fresh record low of 79.41 against the US dollar on Monday as investors continue to favour greenback as safe haven bet. In early morning deals, at the interbank foreign exchange, Indian rupee opened lower at 79.30 and went on to slide further, breaching its previous record low of 79.37 levels.