Closure of Strait of Hormuz pushes up polyester fibre price

Coimbatore: Polyester fibre price has increased by 12 per kilogram owing to the ongoing conflict in West Asia and the closure of Strait of Hormuz by Iran, according to the Southern India Mills Association (SIMA).According to Durai Palanisamy, chairman, SIMA, the Strait of Hormuz is a key shipping route for oil transport and cargo movement, including textile shipments, to Gulf countries, the UK and Europe. "With vessels unable to pass through the route, cargo ships are now being forced to travel around Africa via the Cape of Good Hope, leading to shipment delays."This diversion could delay cargo movement by 20 to 25 days, affecting timely trade, he said. "Exporters may face increased freight costs, order cancellations and pressure to sell goods at discounted prices."Durai said the disruption had led to a shortage of raw materials, pushing up synthetic yarn prices. "In the past week, the price of polyester fibre has risen by 12 per kg. Two days ago, the increase was around 6, but it has now doubled. Polyester 1.2 denier fibre is currently selling at 114.25 per kg," he said.With polyester accounting for nearly 75% of synthetic fabric production, the price rise is expected to impact textile manufacturers. Durai said there was a risk of decline in garment exports worth about $2 billion to the UAE annually and around $1 billion to other Gulf countries.He said while India's textile exports had bright prospects in the international market due to free trade agreements and several new initiatives by the Union govt, the ongoing conflict and changes in shipping routes were now putting pressure on the industry.