India's PSF rates 25% higher over China; QCO fuelling the spike?

PSF prices were recorded at $1.33 per kg in October 2023. They decreased by 3.76 per cent in November, bringing the price down to $1.28 per kg. In December, they further fell by 2.34 per cent to $1.25 per kg but then slightly increased by 0.80 per cent to $1.26 per kg in the first week of the current month. Over the last three months, the prices have decreased by 5.26 per cent due to both domestic and international market dynamics, according to Fibre2Fashion’s market insight tool TexPro. 

In October of the previous year, PSF prices were hovering at $1.02 per kg in the Chinese domestic market, significantly lower (30 per cent) than the Indian prices. These prices eased to $1.01 per kg in November and further to $0.99 per kg in December 2023. However, they increased back to $1.01 per kg in the first week of January. Chinese prices have eased by around one per cent in the last three months after fluctuating by about two per cent. 

The Chinese FOB price of PSF remained steady between October 2023 and January 2024 at $1.07 per kg. However, it decreased to $1.06 per kg in November and $1.05 per kg in December, before gaining 1.90 per cent to $1.07 per kg in the current month, as per TexPro.

Over the last three months, the domestic price gap between the two countries has narrowed. However, Indian prices remain significantly higher than those in China, at 24.75 per cent higher. Industry experts suggest that the QCO has restricted the import of PSF, allowing domestic manufacturers to maintain a higher price in the Indian market. They argue that while the government is protecting the domestic PSF and upstream industry, this is at the cost of the downstream industry. The weaving industry, in particular, is struggling to compete in the global market due to the higher prices of raw materials like PSF. 

Fibre2Fashion News Desk (KUL)