Levi’s faces price pressure

Most apparel brands are reeling under the pressure of high cotton prices. And to cope with it

some have resorted to price hikes. In keeping with this trend, global jeans maker Levi Strauss too plans to hike prices if the cost of cotton continues to surge. The brand is facing difficulties because of the hike but it doesn’t want to compromise on the quality.  At present, they sell Levi’s jeans priced within the range of Rs 1,799 and Rs 4,000. However, cotton prices are surging, especially the standard cotton variety. Traders expect prices to rise despite a larger harvest this summer. Cotton prices, which witnessed an upward trend during the beginning of the season, have stabilized now because of the ban on export. But despite this, cotton prices did not drop due to a spurt in domestic demand.

The Gujarat government has introduced a cess on cotton that is sold out of the state and it increases cotton prices by about 2 per cent. Tamil Nadu, which accounts for nearly 45 per cent of the total spinning capacity in the country, is the biggest buyer of Gujarat cotton. Industry expects cotton arrivals to be around 310 to 325 lakh bales in 2010-11. According to traders, this season’s good prices will prompt more farmers to cultivate cotton.