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Apparel prices are likely to remain soft during H2 FY21: Ind-Ra

The apparel segment Wholesale Price Index recovered to pre-COVID-19 levels in November 2020, led by the festive and marriage season demand, India Ratings and Research said in a report on Friday

twitter-logoPTI | January 16, 2021 | Updated 22:26 IST
Apparel prices are likely to remain soft during H2 FY21: Ind-Ra

The apparel prices are likely to remain soft in the second half of 2020-21 even as the segment is in a recovery mode, according to a report.

The apparel segment Wholesale Price Index recovered to pre-COVID-19 levels in November 2020, led by the festive and marriage season demand, India Ratings and Research said in a report on Friday.

However, Ind-Ra continued to expect apparel prices to remain benign in the second half of 2020-21, leading to inventory liquidation.

Meanwhile, Ind-Ra noted that the demand for blended fabrics recovered in November 2020 and was 20 per cent higher from the same period of the previous year, led by the festive and marriage season demand.

Cotton knitted fabrics production increased for the fifth month in a row in November 2020, led by a surge in demand from the opening of retail stores and malls.

Further, it stated that demand for cotton woven fabrics increased sequentially in November 2020 but it was 40 per cent lower year-on-year on the back of a lower demand for formals and school clothing.

Meanwhile, the report also stated that fabric exports continue to recover in November 2020, although remaining 14 per cent lower y-o-y on value terms.

However, export volumes surged by 14 per cent y-on-y in October 2020, it added.

Fabric players would likely to remain weak for the second half of 2020-21, due to social distancing and the fear of a second-wave of the pandemic and emerging of a new coronavirus strain, it said.

On home textile, Ind-Ra said it expects the players to increase their market share in terry towels and bed linens, led by supply chain diversification away from China.

Home textiles players continued to witness a steady recovery over October-December 2020, led by consumers' willingness to pay for health and wellness across the US and EU territories, it said.

Players in segments such as bed sheets, towels and advanced textiles have announced capital expenditure to increase their operating capacity, it said.

Further, depreciation of rupee against the dollar by 6 per cent y-on-y during the nine months of 2020-21 contributed positively for exporters, it stated.

The agency continues to expect a healthy and sustained demand improvement for players in their export markets, led by the restoration of retail store inventories, it added.

Also Read: Apparel sales recover 70% in festive season; outlook for FY21 still grim

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