Used textile collectors and processors from across the world will be gathering at the first ever International Textile Recycling Summit in Miami on 2 June.
Organised by the BIR textiles division in conjunction with US trade association SMART, it is sure to stimulate interesting and lively debates about the future of the sector. However, the current issues affecting the market globally will also form a very important part of the discussions.
The UK market is still facing major economic woes. Collectors’ warehouses are full and some charity shops are ringing around the different collectors, struggling to find someone who can take their goods. At the same time the value that UK exporters are able to get in the important markets of Eastern Europe and Africa across all grades of used clothing are continuing to fall.
For many years, British exporters have been able to command a higher price for their goods compared to other countries, with foreign customers perceiving that British clothing is of better quality. But TRA members have been reporting that quality from charity shops have been declining for some time, with more rotating of stock between the different shops in their chain before eventually selling on unsold items to textile collectors.
Additionally, as more steps are taken to extract more clothing away from the waste stream, the quality coming out of local authority collections has also depreciated. It seems as though Eastern European and African buyers are wising up to this. Prices they are prepared to pay for UK clothes are beginning to fall into line with those of other European countries. Although there is still some way to go before complete parity is realised.
Anecdotal reports of falls in prices paid by clothing collectors to charity shops of between £50 to £100 have been given and though it is difficult to verify, the current market prices being quoted are a long way off the £600/tonne or more that were being paid at the beginning of the year. Similarly prices being paid for new textile bank contracts are lowering and these should be reflected in market price reports over the next few months.
We are also seeing a number of “Cash for Clothing” stores now closing. The recent high value of UK used clothing has enabled these businesses to be established. However, it seems as though this was on the crest of an economic wave and which is now crashing. So for many of these stores their lives could be short lived.
Putting the quality issue aside, why are foreign buyers becoming more picky about the clothing they purchase from the UK? There is uncertainty in a number of key markets. Ukraine is an important market. Although only a limited number of UK collectors export directly to this country, it is a very important market for the European customers of British businesses. With the current political upheaval and the threat of civil war looming, business with Ukraine is suffering so Eastern European buyers are becoming more focused on price and quality. British businesses are therefore disproportionately suffering.
The African markets are being affected in a variety of ways. Currency depreciation against the Pound continues to be a problem. In the last 12 months the Ghanaian Cedi has fallen by around 40% and Kenyan Shilling is continuing to suffer. Both countries are very important markets in Sub-Saharan Africa. Buyers here are not in a position to pay the increased costs in local currency and instead are opting to buy cheaper clothing from other countries in Europe or North America. Confidence in Kenya will no doubt be further undermined by a second huge fire in recent weeks and a terror attack at the Gikomba market in Nairobi. This open air market is one of the biggest in East Africa and is vital to the used clothing sector in the region.
In addition, although civil unrest in Sub-Saharan countries such as Chad, Central African Republic, South Sudan, Somalia and Nigeria may not be directly affecting British markets, it is creating uncertainty, which could spill over into neighbouring countries, thus affecting exports to Africa further.
The immediate future remains uncertain. If collectors are providing a reliable service and paying promptly we would advise local authorities and charities to avoid the temptation to jump ship if the collector has to drop their prices, especially if they are actually paying a competitive market price, albeit at a lower rate. We need to ensure that the hatches remain tightly battened down.
If there is a silver lining to these problems it could be that the with collectors being unable to sell on unsorted clothing at a profit, more of them are beginning to re-establish sorting processes here in the UK in an attempt to extract more value from the clothing and textiles that they have collected. This in turn will create more jobs in the UK.
Alan Wheeler, director, Textiles Recycling Association