First of all, we stand firmly in support for world peace. It is with a heavy heart that we share this blog post. We already have seen how COVID-19 has affected the rise of raw materials prices in a previous blog post. Now, the war hits and it worsened this increase. The biggest economical impact until now is in the commodity and logistics sectors. These are expected to make the high inflation levels even worse in the European economies particularly, which are more dependent on energy supplies from Russia.
- Higher oil prices push up the cost of man-made fabrics (such as cotton which has been experiencing a really high demand in the past year). It results in a clear instability in pricing.
- The dyeing industry is very much impacted as the machine used to dye your beautiful garments run with petroleum. More and more, machines are running with solar panels; though it is a big investment that some suppliers are not willing to make. The effect of the war might be a path to green energy (always look at the bright side).
- The logistics sector has unfortunately the highest increase as all transports are done by road, by air or by sea. Either way, it sucks petroleum. Every piece of a garment is shipped to the manufacturers, so it results in higher prices and huge delays.
We could continue endlessly on how our economy is severely impacted, but I think you got the big picture. The relationships of nations have been drastically affected by the war, the sanctions imposed from Europe and the U.S to Russia will leave an economic gap.
On a consumer-end, here’s something that the haute-couture brands would not have imagined : the act of freezing bank accounts of wealthy Russians. The haute-couture sales in European capitals frequented by Russians have decreased significantly, although this promises to be a short-lived effect.
As you can see, this crisis will impact textile exports and consumption. The war is affecting the entire world on humans and economies. The future of the globe is quite uncertain, but we should not forget, we are all connected!
To world peace,
Sources: Cotton Grower, Fibre 2 Fashion, Hindustan Times, CNBC : Cotton prices just hit 10-year high, Capital Economics : How high energy prices affect other commodity prices
Keywords: economy, textile industry, textile market, war, commodities, raw materials, logistics, inflation,