Q2 apparel prices to remain soft, demand for cotton fabrics, home textiles to increase: Ind-Ra

India Ratings and Research (Ind-Ra) in a report stated apparel prices are likely to remain soft in the second half of 2020-21 even as the segment is in a recovery mode. The apparel segment Wholesale Price Index recovered to pre-COVID-19 levels in November 2020, led by the festive and marriage season demand, said the report.

However, Ind-Ra continued to expect apparel prices will remain benign in the second half of 2020-21, leading to inventory liquidation. It also noted 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, 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 fabric exports continue to recover in November 2020, although remaining 14 per cent lower year-on-year on value terms. However, export volumes surged by 14 per cent year-on-year in October 2020, it added.

Fabric players would likely 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 the players will increase 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.