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The relocation of orders in the textile and clothing sector, which before the crises were destined for Chinese companies, is putting pressure on prices and threatening the industry’s margins. In the case of Turkey, the sudden uptick in demand has led to an increase in prices, and retail giants are already preparing to cut their margins in 2020. “There is a collapse in capacity: those who were already in Turkey are guaranteed, but those who are only going there now will pay more”, says an executive of the sector quoted by the Spanish newspaper Modaes.
The scene is also playing out in Morocco and Tunisia, though Turkey is so far the refuge market most sought by customers who were indexed to the Chinese market – and the increase in demand has led to a corresponding increase in prices, brought forth by the obvious difficulty of obtaining supplies in various parts of the value chain.
The impact of this price hike is increasingly noticeable, especially when it comes to the 2020 autumn – winter season. Besides the proximity to the European consumer market, one of Turkey’s advantages as a supplying centre for the fashion sector is entailing the entire value chain in its territory, from raw materials (Turkey is the world’s seventh largest cotton producer) to clothing.
Right now, Turkey is the sixth largest textile maker in the world, with a 3.1% global share, in a ranking led by China and followed by the European Union, Bangladesh, Vietnam and India.
C&A, H&M, Inditex and Gap are some of the international brands that use Turkey as a supplying country.