Iran war raises polyester cost, fast fashion may get expensive

The Iran war has caused a sharp rise in oil prices, which has raised the cost of polyester. This is affecting textile industries in India and Bangladesh and may soon make fast fashion brands more expensive, as per reports.

Polyester is made from petroleum products. The war has disrupted supply of oil from the Middle East, raising the prices of raw materials like Purified Terephthalic Acid and Mono Ethylene Glycol (PTA and MEG) by nearly 30%. This is making it costly for manufacturers to produce yarn and fabrics. In Surat, a major textile hub in India, factories are struggling. Reports suggest that some machines have stopped working, and production has dropped significantly. 

The situation has also affected migrant workers. Due to a shortage of cooking gas, a large number of migrant workers have left, which is creating labour shortages and slowing down production. In Bangladesh, factories are facing higher costs for sewing thread and transportation. A major thread company has already increased prices by over 15%. Industry experts warn that if this continues, clothing production may decrease.

Retailers are not yet fully affected because they had already bought stock earlier. However, if high prices continue, brands may increase product prices, leading to lower demand from customers. As per reports, experts say this could lead to ‘demand destruction’, where people buy fewer clothes due to higher prices. 

The impact is not limited to clothes. Sneakers and other products made from oil-based materials are also becoming more expensive, which could further raise retail prices in the future.