At a time Micro Small and Medium Enterprises (MSMEs) in Coimbatore have accused local traders of revising prices of raw materials on a daily basis, the latter are blaming manufacturers of revising the prices regularly.
The traders added that commodity prices are up internationally and this is resulting in higher manufacturing costs.
A steel trader said the price of steel products has risen over 25% in the last four or five months. The steel manufacturers cited increased input costs for the upwardlyrevision. The prices can be controlled only with the intervention of the government and policy level decisions on exports, etc., he said.
The local traders normally have one to two month stocks and sell to customers on credit, which goes up to three months. Industrial demand for raw materialshas gone up since most of the units exhaused the inventory with them in March. So, after lockdown relaxations, when industrial activity picked, they had to purchase raw materials.
For the traders, manufacturers have increased prices twice or thrice a month too and some manufacturers sell at the point of production it self. "When the demand is high and supply is tight, the traders tend to increase prices," he said.
In the case of bearings, China has hiked prices by nearly 30 %. While the domestic manufacturers have not gone in for major revision, they are expected to do so shortly, said a trader.
Another major raw material affecting the engineering and construction sectors is PVC. There are just 10 to 15 globally major players and some of them stopped production because of the spread of COVID-19. They are just resuming operations. Hence, globally, there is shortage in availability of PVC and it has led to higher costs, the trader said.
