Cabinet prices shoot up by almost Rs 100

Following RAM, now the prices of cabinets have increased up by Rs 100 in the
local IT market. Acc-ording 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 att-ribute
it to the revision in tax structures in China, the hub of manufacturing of IT
pro-ducts. 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. However, 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 inventory. Once new stocks come in,
they will have to effect the price change," said a promoter of leading
brand based at Chennai. "According to our know-ledge, the price increase is
due to the revision of freight charges by $ 300 per con-tainer and also the raw
material prices are going up. We expect that prices would go further up before
this month-end."

Presently, the market sells cabinets from as low as Rs 700 to Rs 2,000 on the
higher side. "We have increased our prices two weeks back and the revision
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 lower price to clear the inventory," said an
official of the leading brand promoted from Sin-gapore. He also believes that
the cost price of raw mate-rials has gone up in the inter-national market.

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

S Gopikrishna

Chennai