A Study on the Effect of Material Price Fluctuations on the Profitability of Yarn Industry in India (with Special Reference to Precot Meridian Ltd)

Abstract

This article focuses on the effect in profitability of yarn producers when the prices of cotton are fluctuating with special reference to Precot Meridian ltd.  Even though there is an increase in the sales volume and reduction in the cost, Yarn producers facing the risk of maintaining the profitability margin. The only raw material of yarn production is Cotton. And the cotton is a seasonal product. So the purchase of raw material is on seasonal basis. Cotton price in Domestic Market and International Market are different and it is always fluctuating.  After Globalization as the yarn producers have both domestic and export sales, they have to face heavy competition in domestic market with importers and in the foreign market with other yarn export countries.

Keywords: Cotton, Yarn, Price fluctuations, Precot meridian