Middle East Conflict Driving Up Clothing Costs
The ongoing conflict in the Middle East is increasing production costs for clothing, particularly due to rising energy and freight prices as well as surging raw material costs. At Plummy Fashions in Dhaka, a factory supplying Zara, some orders have been put on hold amid higher polyester prices driven by fossil fuel costs. Cotton has also spiked due to supply concerns, fertilizer shortages, and fears of El Niño affecting harvests later this year. Manufacturers are adapting production processes while retailers face the dilemma of raising prices or accepting thinner margins. Consumers may start feeling these impacts in autumn, with more pronounced effects expected next spring as brands typically place orders up to a year ahead. The apparel sector is already reeling from previous disruptions like the pandemic and US tariffs. The simultaneous rise in both polyester and cotton costs has removed flexibility for brand substitutions, according to McKinsey & Co., adding pressure on manufacturers who are seeing input cost increases across all areas including dyes, chemicals, oil, and gas.
Topics: clothing industry cotton supply El Niño impact Middle East conflict polyester prices