Textiles recyclers have been urged to open talks with suppliers amid warnings that current prices could force some merchants out of business.
Alan Wheeler, national liaison manager at the Textiles Recycling Association, said members should ensure that prices paid for clothing were economically viable.
Several merchants have insisted that competition for supply of used clothing in the UK is pushing prices beyond a level that can be sustained by falling export demand.
Wheeler said: “Some TRA members have been reporting that supplies of used clothing in the UK have been sufficient recently while demand in the traditional export markets is easing a little – particularly in Africa, where recent political instability in Libya and ongoing problems in Somalia are having an impact on their sub Saharan neighbours.
“It is important that collectors of used clothing work with their suppliers in order to ensure the market prices become viable in the long term, and to try to avoid the risk of a sudden price drop.”
One industry source told MRW that demand for secondary clothing in traditional markets such as Kenya was significantly weakened at the moment but the cost of securing used clothing in the UK remained high.
“The feeling in the industry is that some merchants are paying highly inflated prices to make sure they get contracts,” the source said.
“On one contract we held, someone came in £200 per tonne above us. Some small firms are going under trying to compete, while the feeling is that a big company could also fail.”
Another industry figure said: “A number of collectors are now struggling to fulfil their commitments as they have expanded too fast and not taken account the impact of the global economic crisis.
“This has severely affected cash flow. If prices don’t drop then you may start seeing some companies failing to meet their service requirements or pay their bills.”
Wheeler told the Bureau of International Recycling (BIR) last month that economic and political factors were putting pressure on the textile recycling market.
He said the TRA’s members had reported members of the public and charity shops holding on to clothing for longer, and a declining quality of new garments.
A TRA report presented by Wheeler to BIR said: “Inflation is raging in Kenya and the value of the Kenyan shilling has decreased by around 25% against the UK pound, making British goods extremely difficult to sell in Kenya.”
Problems in Somalia from piracy, political instability and drought were also identified as impacting exports to east Africa.