Will soaring textile fiber prices drive up the price of clothing?

At a time when the world of fashion is gathered in London for Fashion Week, the sector is jostled by the surge in textile prices: an additional difficulty for an industry already struggling with the pandemic and Brexit.

Cotton, but also linen, silk, wool and synthetic materials derived from petroleum have seen their prices soar in recent months, galvanized by strong demand thanks to the global recovery combined with soaring energy and transport prices. .

In 2021, cotton prices have thus increased by nearly 45% to reach $1.29 per pound at the beginning of the month, a peak for more than ten years.

The organic sector is particularly affected, with a 90% surge in prices of organic cotton from India in one year, according to sector data.

For the textile industry, this translates into “a shortage and an increase in costs”, explains Euratex, the confederation which brings together European textile manufacturers.

The price of other natural fibers like wool and linen has also been rising since the end of 2020, after nearly three years of decline.

“The sharp rise in oil prices […] increases the cost of synthetic fibers which directly compete with cotton,” comments Carsten Fritsch, an analyst at Commerzbank.

Polyester, nylon and acrylics are produced from chemicals derived from petroleum. Their price is therefore directly linked to that of black gold, whose prices are currently close to seven-year highs.

Demand is all the stronger as textile buyers want to protect themselves from prices they anticipate rising by building up stocks. Result: “it is more difficult for global buyers to source cotton anywhere,” said Jack Scoville, analyst for Price Group.

Inescapable repercussions

Rogie Sussman Faber, owner of Vogue Fabrics, a well-known fabric store in suburban Chicago, notes, however, that soaring transportation costs almost eclipse that of fibers. “In the United States, we are more affected by the sharp increase in transport costs than by the price of materials,” she says.

According to her, a container from Asia arriving in the United States now costs between $12,000 and $16,000, compared to $3,000 before the pandemic.

Yves Dubief, president of the Union of Textile Industries, in France, also points to the rising prices of gas and electricity, of which the sector is a major consumer.

An increase in cost prices which weighs particularly on small, more fragile companies. “You need strong cash flow to fund operating costs. Companies can decide to stop their production, ”he laments.

Price repercussions on finished products such as clothing seem inevitable, according to several experts. “Consumers could start to see prices go up,” said Jack Scoville.

Especially since the price of clothing has already contributed, last month, to pushing inflation to a peak in thirty years in the United Kingdom, at 5.5%. The giants of the sector should however weather the storm without leaving too many feathers.

Associated British Foods, the parent company of the British behemoth of the ” fast fashion Primark, however, assured that the increase in its manufacturing costs would not induce an increase in prices.

At the end of 2021, the Swedish H&M claimed to be “accustomed to fluctuations in the cost of raw materials as well as to other external factors which could potentially impact purchasing costs”.

To see in video


source site-42