Polyester Fiber Prices Surge 12/kg Amid Middle East Conflict, Shipping Disruptions
The price of polyester fiber in India has increased by ₹12 per kilogram, a significant spike attributed to the ongoing conflict in West Asia and the closure of the Strait of Hormuz by Iran, according to the Southern India Mills Association (SIMA). This development is sending shockwaves through the textile industry, with potential repercussions for exports and manufacturing costs.
Shipping Route Disruption and Extended Delays
Durai Palanisamy, chairman of SIMA, explained that the Strait of Hormuz is a critical maritime passage for oil transport and cargo movement, including textile shipments destined for Gulf countries, the United Kingdom, and Europe. With vessels now unable to navigate this route, cargo ships are being forced to take a much longer alternative path around Africa via the Cape of Good Hope. This diversion is expected to delay cargo movement by 20 to 25 days, severely impacting timely trade operations.
"Exporters may face increased freight costs, order cancellations, and pressure to sell goods at discounted prices," Durai warned, highlighting the immediate economic strain on the sector.
Raw Material Shortage and Price Escalation
The disruption has led to a shortage of raw materials, directly pushing up synthetic yarn prices. In the past week alone, the price of polyester fiber has risen by ₹12 per kg, doubling from an increase of around ₹6 just two days prior. Currently, polyester 1.2 denier fiber is selling at ₹114.25 per kg. Given that polyester accounts for nearly 75% of synthetic fabric production, this price hike is poised to significantly affect textile manufacturers across the country.
Impact on Textile Exports and Industry Outlook
Durai expressed concern over the potential decline in garment exports, estimating an annual risk of about $2 billion to the UAE and around $1 billion to other Gulf countries. While India's textile exports have bright prospects in the international market, thanks to free trade agreements and several new initiatives by the Union government, the ongoing conflict and altered shipping routes are now exerting substantial pressure on the industry.
The situation underscores the vulnerability of global supply chains to geopolitical tensions, with the textile sector facing heightened uncertainty as it navigates these challenging times.
