Unseasonal weather, regional conflicts, higher costs and supply exceeding sluggish demand are combining to create a gloomy backdrop for market players.
The global outlook for the used clothing and textile market is currently clouded by a series of challenging factors that have cast a shadow over the industry. There are various forces at play in the market.
One prominent factor contributing to the gloomy outlook is the persistent issue of high inflation rates. These escalating prices are weighing down on consumers’ purchasing power, making them more cost-conscious and selective when it comes to buying used clothing. As a result, the demand for second-hand garments has been notably sluggish in many major markets.
Another significant challenge that the industry faces is the unfavourable and often unstable foreign exchange rates. These currency fluctuations can have a detrimental impact on international trade, making it difficult for market players to predict and manage their costs effectively.
The uncertainty surrounding foreign exchange rates adds an additional layer of complexity to the already intricate web of market dynamics.
Sales of winter clothing, specifically in Europe and nearby markets like the former Soviet countries in Asia and the Middle East, are experiencing a dip compared to typical seasonal levels. Unseasonably warm autumn temperatures have played a role in reducing the demand for winter garments.
Furthermore, the ongoing war in Ukraine continues to disrupt trade into what was the biggest market for used clothing in Europe. Additionally, the eruption of the war between Israel and Gaza, has the potential to cause more ongoing uncertainty amongst international used clothing/textile traders which could supress the markets as well.
South-East Asia is also witnessing a slowdown in used clothing sales. In addition to this, one European sorter has resorted to storing African bales rather than selling them. This is concerning, as the period from October and November is traditionally the busiest time for global used clothing and textile trade. Businesses usually rush to ship their goods to destination markets to meet the pre-Christmas demand.
However, the current lacklustre market conditions are causing some companies, particularly those with a smaller stake in the used clothing trade, to wind down their activities with little hope of resuming until the New Year.