The price of polyester fibre has risen by Rs. 12 (US $ 0.13) per kilogram following disruptions to global shipping caused by the ongoing conflict in West Asia and the closure of the Strait of Hormuz by Iran, according to the Southern India Mills Association (SIMA).
Durai Palanisamy, Chairman of SIMA, stated that the Strait of Hormuz is a critical global shipping corridor used for transporting oil as well as cargo, including textile shipments bound for Gulf countries, the United Kingdom and Europe. He explained that with vessels unable to pass through the route, cargo ships are being forced to divert around Africa via the Cape of Good Hope, significantly extending transit times.
According to Palanisamy, this diversion is likely to delay cargo movement by around 20 to 25 days, disrupting supply chains and affecting the timely delivery of goods.
He further noted that exporters could face increased freight costs, order cancellations and pressure to sell goods at discounted prices due to the disruption.
Palanisamy added that the shipping bottlenecks had already begun affecting the availability of raw materials, leading to a rise in synthetic yarn prices. He said that the price of polyester fibre had increased by Rs. 12 (US $ 0.13) per kilogram over the past week. Two days earlier, the increase had been around Rs. 6 (US $ 0.065) per kilogram but had since doubled. Polyester 1.2 denier fibre is currently selling at Rs. 114.25 (US $ 1.24) per kilogram.
With polyester accounting for nearly 75% of synthetic fabric production, the price surge is expected to impact textile manufacturers across the sector.
Palanisamy warned that the disruption could also affect India’s garment exports to the Gulf region. He said there was a risk of a decline in exports worth approximately US $ 2 billion annually to the United Arab Emirates and around US $ 1 billion to other Gulf countries.
He noted that although India’s textile exports currently have strong prospects in global markets due to free trade agreements and several new initiatives by the Union government, the ongoing conflict and changes to global shipping routes are placing additional pressure on the industry.
Source: https://apparelresources.com/