Cabinet prices shoot up by almost Rs 100

Following RAM, now the prices of cabinets have increased by Rs 100 in the
local IT market. Accord-ing to market sources, the price increase is due to a
shortage of raw materials in the global market and it is expected to go further
up in the coming weeks. However, a section of resellers say that the price
increase is due to the recent hike in freight charges, while others attribute it
to the revision in tax struc-tures in China, the hub of manu-facturing of IT
products. As usual, the market is in the dark and trying to interpret their own
reasons for the sudden price increase.

"We have revised our prices by Rs 25 in the entry-level and Rs 60 to 75
in the mid and high-end range of products. How-ever, some of our competitors in
the local market are not increasing the price for the time being, giving a tough
time in business. We are sure that they cannot continue this for long and they
might be playing this game with their old inven-tory. Once new stocks come in,
they will have to effect the price cha-nge," said a promoter of lead-ing
brand based in Chennai. "According to our knowledge, the price increase is
due to the revision of freight charges by

$ 300 per container and also the raw material prices are going up. We expect
that prices would go up further before this month-end."

Presently, the market sells cabinets for as low as Rs 700 to Rs 2,000 on the
higher side. "We have increased our prices two weeks back and the revi-sion
is between Rs 50 to 100. All leading brands have revised their prices, except
for some few local products. This is the time for the local products to push
their sales offering at a lo-wer price to clear the inven-tory," said an
official of a lead-ing brand promoted from Sin-gapore. "The cost price of
raw materials has gone up in the international market."

"Although our import price has increased, we are not able to revise the
selling price since some resellers in the local mar-ket are offering at a lower
pri-ce. They are not long standing players and serious in business. However, all
new orders placed in the international market will reflect the price
change," said a representative of a leading Delhi-based company.

S Gopikrishna

Chennai