The Federation of Hosiery Manufacturers’ Association of India (FOHMA) has over the past four decades been endeavouring to come out with new initiatives to assist the industry in becoming world class and organised to benchmark itself against the best in the world.
At its AGM held on September 21, 2015, in Kolkata, the FOHMA Hosiery Cost Index (HOSEX) was launched. The HOSEX as on January 1, 2016, is 130.09 against 131.39 on September 1, 2015. The main reason for the marginal fall in the cost index is the drop in cotton yarn prices in the last four months. Other parameters have stayed almost stable.
This index has been conceptualised by the FOHMA Vice President (Central), Mr. Sanjay K. Jain (T T Ltd.). He said that FOHMA hopes that, with proper support from industry players and others, it will be possible to establish a universally accepted index which will be a guiding tool for both buyers and sellers. The first cost index for any textile industry segment in the country, this enables companies to benchmark their pricing to a systematic cost plus scenario and ensure the same is accepted by the market. It highlights the average movement in costing for a representative basket of hosiery goods over a period of time. For example if the cost was Rs. 100 in January 2010 and the index is 132 today, it means over the period the cost for the industry has gone up by 32 per cent. However, specific products may have gone up more or less depending on its specifications.
The index just gives a broad idea for the industry as a whole. Its relevance is more in giving an idea of the direction of movement of costing rather than absolute movement.
The industry is slowly graduating from a fragmented market scenario to a more organised one where more large buyers are emerging as organised retailers, institutional players and e-commerce giants. They have much more bargaining power and can squeeze companies/brands in an inflationary situation.
India is an inflation-prone country due to its structure and phased process of development. In such a scenario, it gets difficult for brands and companies to convince buyers of the need for a price hike. On the other side, it will also provide direction to buyers and help them in ensuring a correct pricing for them. This index is expected to create a win-win and balanced scenario for both buyers and sellers.