Price rise on consumer goods on cards

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Freight cost has come down from its peak levels and container availability is no more a big problem, yet a price rise across garments, agricultural commodities and consumer goods is on the cards, says a report.

Prices of TVs, smartphones, refrigerators and air-conditioners are likely to go up 5-6% by next month as input cost has increased by 10-12%, reported The Economic Times.

Freight rates eased 5 to 15%

While apparel exporters are renegotiating rates with big brands to pass on higher cost, agriculture items such as basmati rice are already dearer due to disruption in production and supplies, said the report.

Freight rates have eased 5-15% from the peak of $10,000-12,000 in August for carrying a container from or onwards to India.

Though the rates are still higher than $3,000-4,000 at the beginning of the year, exporters hope that prices will cool. They expect lower prices and improvement in container availability will help boost exports, which rose 43% in October to $35.65 billion, according to the report.

Lalit Thukral, president of the Noida Apparel Export Cluster quoted in the report as saying that overseas apparel buyers including the big brands like Zara, Mango and others have agreed to take into consideration a portion of the freight cost while fixing prices.

The rising yarn prices are, however, a cause of worry for the apparel industry. Yarn prices have increased by more than 60% in the last one year. Thukral said prices have to be hiked off, but he is not sure whether buyers will accept the price rise.

Poorna Seenivasan, president at Gokaldas Exports, a large manufacturer and exporter of apparel is quoted as saying that availability of containers has improved.

Consumer electronic companies said shipping and air freight rates from China and Hong Kong have come down by about 10-15% from the peak in August. According to the report, container rates are now varying between $6,000 and $6,500 from China, compared with $7,000 even a month ago, and air freight from Hong Kong is down to HK$36-37 a kg from HK$44-45.

Godrej Appliances business head Kamal Nandi, is quoted as saying that the rates are slightly down but remain higher than June quarter rates of around $3,500 per container. Input cost pressure remains, forcing a price hike, he added.