Winter clothing: Prices continue to rise as mercury drops

Traders tap Vietnam, Bangladesh for supplies, switch to cheaper modes of transport.

KARACHI: The prices of winter clothing items, including sweaters, jackets, mufflers and the like, have registered a sharp increase against last year due to a weaker rupee against most major Far Eastern currencies, forcing garment importers to explore alternative markets for supplies.

An informal survey by The Express Tribune of markets in Karachi confirmed that prices of winter apparel have witnessed a near 80 per cent hike from last year due to foreign exchange differences, high import duties and an increase in transportation cost.

In the more popular shops, imported sweaters were priced between Rs1,200 and Rs3,000, while leather jackets were priced above Rs3,000. Unbranded, imported sweaters were priced between Rs900 and Rs2,500, while jackets were tabbed between Rs2,000 and Rs2,800.

Meanwhile, locally manufactured sweaters were available for between Rs250 and Rs800, while jackets were between Rs1,500 and Rs2,200.

Consequently, the demand for branded, imported garments has reduced by about 70 per cent, while the demand for locally manufactured goods and second-hand clothing has surged equally significantly.

Chairman Traders Action Committee Siddiq Memon explained that appreciation in values of the Chinese yuan, Thai baht and Indonesian rupee against the local currency has resulted in the imports of products from these countries becoming very expensive.

“China, Thailand and Indonesia have traditionally been the top three nations from where we import most of our garments like jeans, shirts and jackets – for daily wear and the winter season,” said Memon.

The products of these countries are not considered branded but they are of good quality and reasonably priced, the reason most Pakistanis prefer garments from these countries, he added.

The traders’ representative went on to say that taxes and duties on imported items have compelled importers to reduce orders from Far Eastern countries. “Earlier, importers used to order containers which were charged taxes by the dozen (12 pieces), but now taxes are charged per kilogramme of clothing – which has made an exorbitant difference to the final tax amount importers have to pay.”

Prices have also been impacted due to a surge in transportation costs. Winter garments sold in Punjab and Khyber-Pakhtunkhwa, in particular, are far costlier than those sold in Sindh because goods are now being taken to markets in these two provinces via road instead of rail.

“Importers have experienced repeated issues with the rail route as our consignments were constantly being delayed,” said Mohammad Asif, a wholesaler who operates his businesses in Karachi, Lahore and Murree. In addition to running his own business, he also acts as a middle-man for smaller garment traders.

He explains that most traders have decided to shift to transporting goods by road, which is at least 40 per cent more expensive than the traditional practice. “But this at least guarantees the delivery of goods on time.” The additional cost, however, is pushed towards the end-customers.

New markets

Garment traders have now turned their attention to Vietnam and Bangladesh since goods from these countries are not only of comparable quality to the more popular sources but also much cheaper. “The Vietnamese dong and Bangladeshi takka are very cheap against our rupee,” said Memon, adding that this season markets are flooded with clothes imported from these two countries.

One shopkeeper admitted that very few traders were informing their customers of the difference and continued to sell clothes at high rates, cashing in on the difference.

Reduced demand, higher prices

Shopkeepers informed The Express Tribune that the flow of customers had ebbed drastically compared to previous years. Maybe one of every three people who visit bazaars is a serious buyer. The rest are all window shoppers, they say.

Furthermore, imported brands are being purchased by only a limited segment of the market. Most of lower and middle-income customers are opting either for locally manufactured garments or second-hand clothing for their cheap prices.

A shopkeeper from KDA market said that women demand more fashionable clothes in winter than any other season. Meanwhile, in men’s clothing, coats and pants are in demand.

Siddiq Memon said that locally manufactured coats were no longer available in the market as most cottage industries involved in the activity had closed down due to the electricity crisis and the ever-increasing cost of doing business. “Dealers were left with no option but to import these products to meet demand,” he added.  The coats are now being sourced mainly from China.

Interestingly, children’s apparel has witnessed the highest price rise as this is the category most demanded by customers. “Parents buy their children warm clothes, often more than one item, regardless of whether they make purchases for themselves or not,” said Moin Ali, a shopkeeper at Tariq Road. The prices of children’s clothing have doubled over last year, Ali added.

Dwindling exports

Exports from Pakistan have also reduced drastically compared with last year. Exporters of sweaters and knitwear informed that last year 2,250 containers of winter clothing had been exported, while only 780 containers were sent out this year.

They blamed the high cost of doing business, electricity and gas crises and unfriendly business policies for the decline, as they have become uncompetitive in the international market.

Published in The Express Tribune, December 13^th, 2010.