ICAC: Cotton and textiles face shipping woes due to Red Sea tension, but hope remains

The cotton and textile industry is facing renewed shipping challenges, though not as severe as the pandemic disruptions. Finished goods like clothing are more affected than raw cotton, impacting merchants and mills heavily.

Geopolitical tensions in the Red Sea have pushed up shipping costs, especially on routes between West Africa-Asia and Europe-Asia. This means:

• Longer delivery times: Rerouted ships could lead to order delays and cancellations.
• Higher inflation: Increased shipping costs add to existing inflation pressures.
• Market delays: Products, especially seasonal items, will take longer to reach consumers.
• Potential wider impact: If high costs spread, the entire cotton trade could suffer.

Despite these challenges, there are glimmers of hope:

• Industry resilience: The industry has experience dealing with logistical issues, like the Suez Canal blockage.
• Positive trade: Global cotton trade is up over 10 per cent compared to last season.
• Price stability: The projected cotton price range remains relatively stable.

The industry must navigate these challenges by finding efficient shipping routes, managing costs, and adapting to changing market dynamics. While the situation is not ideal, the industry's past resilience and positive trade figures offer some encouragement for the future.