Makers of worsted fabric in India are set to face a squeeze in margins this year as global wool prices have reached a new high. International wool prices have increased by up to 180 per cent in the last two years, but Indian worsted fabric makers are unable to pass it on to consumers. Indian consumers are not ready to pay for the price rise and so manufacturers are using more manmade fiber.

Leading makers of winter garments, such as Raymonds, Reid and Tailor, Indoworth India, Jayashsree Textiles, OCM and Reliance are now increasingly moving to polyester viscose from polyester wool to lessen the impact of high wool prices on their margins. Wool is categorised in terms of fiber diameter of between 14.5 microns to 32 microns, and prices are higher for lower micron wool. The price has increased by 70 per cent for the category of wool used by the knitwear industry.

There is a sharp gap in the demand for and supply of wool due to adverse climatic conditions in Australia and it has caused a major rise in wool prices in the last couple of years. India produces about 2.2 million meters of worsted fabric every month.