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Used clothing – the downs and ups (and perhaps downs?)

Barely a day seems to go by now without me receiving a call from the national media to ask for information on clothing collections which in some way or another relate back to the continuing rise in the global value of this commodity.

Up until 2005, the economics of the industry fluctuated cycles of peaks and troughs lasting no more than a few years.  Sometimes when the value of used clothing had reached its peak, they would suddenly fall, virtually overnight.  However, since 2005 there has been no crash and used clothing is now worth more than it ever has been before.

There are numerous explanations abound as to why this may have happened but if you look back to 2004, there were two key events that stick out as catalysts for the event.  The Boxing Day Tsunami on the 26th December 2004 was a truly horrendous event and everyone wanted to try and do what they could to help.  Many turned out their clothing from their wardrobes in the hope that it would raise much needed money for the charity.  Some perhaps also thought (mistakenly) that aid agencies could use the clothing in their relief work.

The result was a glut in the donations of used clothing in the first six months of 2005, which supressed global values as supply outstripped demand.  However as time passed supplies dried up.  The public in Western Countries had emptied their wardrobes and had no more to give.  As supply outstripped demand, prices began to rise again and confidence started to return to the industry.

Although confidence returned in the later part of 2005 this does not explain why the values did not fall again a few years later as they had done before.  To try and offer an explanation for this we can look at another key event of 2004.  In the early 1990s the Eastern European market started to open up, but expansion into this area was always held back by post-Soviet bureaucracy and protectionist measures.  However this all changed on 1st May 2004, when 8 former Eastern Bloc countries along with Malta and Cyprus, joined the EU.  Suddenly the Eastern European market was properly open for business and when confidence returned to the market the following year the demand from this region became insatiable.

Seven years on, we are still experiencing that insatiable Eastern European demand and the market in Africa is still very buoyant.  Whether, it will continue is doubtful.  There are certainly polarised views within the industry as to what will happen next, but something is bound to give.

It’s also important to realise that the increases in prices has not led to an increase in the commercial viability of the industry.  Contrary to what you might read in some badly written newspaper reports, profits have, if anything, fallen for legitimate collectors as costs have soared and collection rates have fallen due to increase competition.  Collectors who team up with charities will also be paying a substantial proportion of their net profits to the beneficiary.  Three TRA members have ceased clothing collections in the last few months because they cannot make it pay.  This has sadly resulted in more than 100 job losses.

In order to secure the long term future it is important for collectors to work with their charity partners and with local authorities and build strong business partnerships an effective communications strategy to get the public to divert more of the estimated 1 million tonnes of textiles still going into the household waste stream.  We may be able to achieve this with the help of WRAP and our partners involved in the Sustainable Clothing Roadmap.  By doing this, established collectors will at least have a fighting chance of riding any storm should there be a fall in global values of used clothing in the future.

Alan Wheeler, national liaison manager, Textile Recycling Association

Historic “Charity Rag” prices (per tonne)

July 2004 - £170

Jan 2005 - £140

July 2005 - £130

Jan 2006 - £190

Jan 2007 - £275

Jan 2008 - £315

Jan 2009 - £425

Jan 2010 - £460

Jan 2011 –£550

These are an estimate of what the values were for charity rag back over the last several years but at least it gives an indication as to how the price dropped at the beginning of 2005 and then has picked up ever since.

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