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Textile price fall caused by tough African market

The price paid for charity shop textiles in the UK has continued to fall this month in response to the demands of the troubled African market.

Textiles sorting companies are struggling to balance their costs as customers in Africa – the main market for surplus charity shop material – have become unable to sustain payments at previous levels.

The price paid for a tonne of material from a charity shop is now around 80-100 – half what it was at its peak. Africa is the main source of income for textiles exporters, but the withdrawal of American grants since September 11, poor exchange rates and political instability have made the African economy more demanding of textile suppliers over the past few years.

Africa

Simon Jackson of TW Beaumont told letsrecycle.com: “The price of goods in Africa has come down since Christmas and the only way we can get our money back is to knock the price of raw material down.” But he warned that there was “no sign whatsoever” of any improvement in Africa.

Terry Ralph of Terimpex agreed that sales of textiles abroad were “very, very bad” because customers were asking for extra credit and discounts and refusing to take the lowest graded goods. He explained: “The African companies want fewer grades at cheaper prices… I have given up to a 15% discount to my biggest customer in the last few months.”

The war in Iraq also seems to have had an impact on sales, as the price of goods sold to Pakistan, which sells on in turn to Iran and Iraq, are the lowest for several years. And while there is some business from Eastern Europe, as this market becomes richer, it is more interested in door-to-door collections and material from clothes banks than charity surplus.

Charity Rags

The price of charity rags delivered to a textiles factory is also falling, as the industry remains under pressure from rising labour costs and an extra 1% on national insurance since April 2003.

Elliot Cohen, chairman of I&G; Cohen and president of the Textile Recycling Association, said that insurance premiums in particular had become almost unbearable since September 11. He said: “There are companies within our Association who have been quoted liability insurance in excess of 100,000… some companies are considering going out of business because the insurance costs are so high. ”

It is generally thought that these costs have been swelled by a growing “claim culture”. Andrew Stockwell of Oxfam explained: “Everybody's being hit very badly now by accident at work claims for injuries and public liability insurance has gone up. With labour claims and health claims, the payouts are that much more. Insurance companies are struggling to make a profit and have been edging their premiums up.”

Move

The situation is so bad that some textiles companies are thinking of moving their sorting operations outside the UK. Some, such as the Salvation Army's partner Kettering Textiles, already have facilities abroad. And one major player told letsrecycle.com he is seriously considering moving 120 jobs to a plant in West Africa if another rise in the minimum wage pushes labour costs up.

But others say they would be reluctant to move abroad. Simon Jackson said: “If it came to the situation where we couldn't drop the price of rag any more, I&#39d; rather sell the mixed material abroad than move our operation out of the UK.”

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