Garment exporters from Tirupur knitwear cluster have started quoting higher prices for their products meant for the exports into British markets so as to reduce the impact of the huge currency volatility arisen following Britain’s exit from European Union (Brexit).
This was one of the slight alterations made by the exporters in their business approach as the British pound has plummeted almost 15 per cent against dollar, rupee and various other currencies subsequent to the Brexit.
Usually, the exporters here have not been hiking the prices of apparels during the past many years even when they faced escalation in costs of raw materials and labour, fearing loss of orders due to the high price sensitivity in the global apparel market.
“We are now forced to quote higher prices in the new quotations sent to the buyers/retailers in Britain otherwise which huge losses have to be incurred”, pointed out R. Girish, an exporter of apparels to Britain.
However, the exporters here pointed out that since many suppliers of garments from other countries to Britain too have now started raising their prices, there would not be much of anxiety in losing orders.
Apart from increasing the prices of products, the Tirupur-based exporters to Britain have also started opting for currency hedging.
“Prudent hedging decisions are vital from now on to minimise losses due to currency volatilities as in the earlier times most of the exporters to Britain were not hedging since British pound was much steadier”, pointed out S. Dhananjayan, a chartered accountant and industry consultant.
Government
support
T. R. Vijayakumar, another exporter of apparels to Britain, feels that the government support in the form of entering into a Free Trade Agreement with Britain would be necessary to help maintain the profitability of the exporters.
