The devaluation of African currencies against the pound is causing a build-up of textile stock in the UK, according to industry experts.
Martin Wilcox, director of textiles recycler JMP Wilcox, told MRW the African market is in “serious trouble”, with the Nigerian border closed for imports causing major problems in West Africa.
Furthermore, he said currencies were suffering in Ghana, Benin, Nigeria and Kenya. They are devaluing against the strong British pound with some third world currencies being devalued by 15-20%.
According to Wilcox the African market is “absolutely important”, with large textile-sorting merchants sending around 65% of their material there.
He said: “If the top five sorters stopped buying materials due to the fact that they couldn’t sell it in Africa then you would have sitting on the market about 3,000 tonnes a week.”
He added: “We are waiting and watching the market to see if Africa can start selling at higher prices to absorb the higher currency costs, but we would take a guess that High Street charity will move down again over the next three months in small increments as merchants manage to slowly move the prices down.
“We are seeing a huge oversupply at our facility where we have stock accumulated of over 1,500 tonnes of used clothing and 200 tonnes of used shoes.”
Wilcox said textiles were also stacking up in UK warehouses because the relatively warm UK weather after Christmas had encouraged the public to recycle in large volumes, and cited positive press coverage of the UK housing market giving the public confidence to buy new clothes and throw out old ones.
Ross Barry, president of the Textiles Recycling Association, told MRW the closing down of many Cash For Clothes shops had also contributed to the oversupply. He said gangs that had been stealing from clothing banks were beginning to look elsewhere.
Meanwhile, Wilcox said that although the Eastern Europe market was reasonable, their industry was “becoming very choosey about the styles of material they buy”.
Barry agreed and said that a mild winter in Eastern Europe had also lowered their demand for clothing. He added that the Eastern Europeans were becoming less inclined to pay premium UK prices against better value deals elsewhere on the continent.
Wilcox added: “Many sorters, suppliers and merchants are talking prices down as they have full stores and empty pockets.”
He concluded: “A strong pound is going to be an ongoing problem for all exporters.”
- In November MRW reported that inflated textile prices, following a boom in Eastern Europe and Africa, would leave the industry unprepared for a market drop in prices. This was forecast after the economic downturn filtered through into Africa.