Asia suppliers of handicrafts split over price movements [Survey]

Small and midsize manufacturers of handcrafted products are nearly equally divided between those that will raise and keep prices stable over the next six months. This is according to Hinrich Foundation's consolidated survey of 145 suppliers in Vietnam, the Philippines, India and Nepal. Carried out in the first half of 2014, the poll looks at supplier forecasts for the second half of the year.

Accounting for 51 percent, there are marginally more companies that intend to maintain quotes. Enterprises that will push up prices represent 48 percent of respondents.

Makers that plan to keep quotes unchanged will mainly do so to remain competitive and attract new customers. The stable supply of raw materials is another factor holding prices steady. These include indigenous components such as bamboo, rattan, seagrass, water hyacinth and other plant-based derivatives, which are commonly employed in home decor and fashion accessories.

Manufacturers that will raise quotes point to increasing raw material costs as the main factor influencing this strategy. In recent months, cotton, wool and other types of imported fabric have become more expensive, with some by as much as 35 percent. In addition, higher expenditure on manpower, especially in areas such as India and Nepal, is another reason compelling companies to adjust their prices upward.

Suppliers that will modify quotes plan to raise them cautiously so as not to compromise their competitiveness and lose too many clients. Nearly two-thirds will keep increases within 5 percent of current levels.

A large majority of respondents expressed confidence in registering higher foreign revenue over the next 12 months. Nearly one-half expect growth to surge by at least 11 percent. Over one-third forecast modest gains of within 10 percent. The optimistic outlook is driven by the continued recovery of the US and EU economies as well as burgeoning demand from alternative destinations such as the Middle East, South America and Southeast Asia.

Most manufacturers will focus on the EU in undertaking market expansion efforts. More than two-fifths plan to emphasize the bloc in attracting new clients especially as several member countries have started to exhibit markedly improved financial climates over the past year. Although North America and the Asia-Pacific region are secondary destinations, they are significant enough that roughly one-fourth of makers are preparing to broaden their reach in each market.

Among suppliers interviewed for this survey, close to two-thirds specialize in fashion accessories such as jewelry, bags, headwear and neckwear. About one-fourth focus on home products, which include furnishings, dinnerware and garden ornaments. The rest manufacture garments.