Heat turned down on textile market

The heat appears to have been taken out of the textiles market with a small weakening in prices and a slight fall in the demand for material.

Textile recyclers have attributed the slight reduction in the price paid for charity shop material to a drop in demand from the export market in Eastern Europe, poor exchange rates and the quality of the material. The price paid for material from charity shops is now between an estimated 530 and 580 per tonne. And, at the top end of the chain the amount paid by exporters has also levelled off or declined.

Meanwhile the price paid to councils for material collected from textile banks has remained relatively stable at 250 to 340 per tonne. However, some in the industry expect these prices to come down at a later date as much of the material is under contract although competition remains firm.

The fall follows a difficult year for textile recyclers, with many raising concerns about the price paid for material bought in bulk as charity rags from charity shops. Several long-established firms in the sector have said that the market has been undermined by charity shops willing to take the highest price they are offered, sometimes by businesses which end up unable to pay or provide a good service.

The high price demanded for the material has also squeezed textile recyclers profits with textile recyclers being forced to dig into their reserves to keep afloat. There have also been reports of a number of textile recyclers exiting the market as a result.

Some believe the shift will see the market return to a more balanced environment where prices are not being dictated by the charities.

Quality

One textile recycler based in the East Midlands told letsrecycle.com he believed the reduction in price is partially due to the low quality of the goods and an unsustainably high price. Poor exchange rates have also had an impact.

He said: I believe the reduction in the charity shop price is due to a couple of things: the biggest problem is the overall quality is low and the price has been too high.

He added that the price paid for charity goods has been too high for the last year, with many companies treading water in a bid to stay in the market. However, he said a handful of firms have closed as a result and in some cases have failed to pay the charities for the goods they have collected.

Exports

Meanwhile, a Manchester-based textile recycler said there has been a lack of demand from the Eastern European market due to the high price of UK goods.

I think part of what has driven the market is the export market in Eastern Europe. They are buying less and less of the UKs goods because they are very expensive and the material they can buy from other European countries, although poorer quality, is considerably cheaper.

He explained that some charity shops are struggling to find collectors who are willing to pay the prices demanded. In addition, some shops are struggling with collectors who are unable to meet the service expectations.

Deal

The Textile Recycling Association (TRA) the UKs trade body for used clothing and textile collectors, sorters and reprocessors has called for textile collectors and charities to strike a deal that works for both parties.

Speaking to letsrecycle.com Alan Wheeler, national liaison manager for the Maidstone based-association, said: We have certainly seen a notable increase in the number of enquiries from charity shops in search of new collectors, because their existing collectors are not able to meet the prices they expect. But the value of used clothing has been unsustainable for a number of businesses for a considerable length of time and a number of charities have seen a drop in the value of their charity shop grade clothing recently. Despite this, the value of used clothing is still relatively high and this has attracted new opportunist competition in the market which has meant that more collectors are chasing after smaller pieces of the proverbial cake.

He said collectors should offer charities competitive prices that they can afford but equally charities should be realistic about what collectors can afford.

Mr Wheeler concluded: Charity shops should be wary of any collector that tries to maintain that it can offer considerably more money than the prevailing market rate. This may be a tactic to obtain clothing in the short term which might not sustainable. Their service may suffer as a consequence and actual revenue for the charity shop may drop.

Mr Wheeler has previously highlighted the increasingly difficult conditions in UK the used clothing market (see letsrecycle.com story).