Military action in the Middle East raises the cost of textile raw materials in China. Foto suertetextile.com
With the unstable oil market, producers are forced to adjust price lists once or twice a day, writes Bloomberg. Wu Ying, the owner of two textile enterprises in Guangzhou, noted that textile distributors warn customers: the final price becomes known only after the order is placed. To maintain financial stability, the factories require customers to increase advance payments.
Exporters working with large chain retailers face particular difficulties. Lily Lu, who runs a company in Zhejiang that supplies clothing to Walmart, said margins on retailer orders are too small to cover rising material prices. The factories themselves have to compensate for the costs of orders already placed. The situation is similar for Shein suppliers, who are negotiating to spread the current 10 percent increase in the cost of chemical fiber over new contracts.
According to Textile Exchange, polyester accounts for about 59 percent of global fiber production, while cotton accounts for 19 percent. For companies operating through high-turnover platforms such as Shein, Temu and Amazon, rising raw material costs are reflected more quickly in the final price to consumers.
Thus, against the backdrop of global geopolitical instability and oil market volatility, Chinese apparel manufacturers are reviewing pricing strategies and payment terms to minimize financial risks and maintain supply stability.
