EU must take actions to secure access to raw materials, EURATEX

29 Mar '11

4 min read

The European textile and apparel industry is deeply concerned with the current situation in the Raw Materials markets. When presenting the recent Position Paper on Raw Materials, Mr. Alberto Paccanelli, President of Euratex - European Apparel and Textile Confederation, recalled: “The steep growth of emerging economies like China, India or Brazil is creating increasing pressure in the markets leading to a lack of availability and price increases for the major textile raw materials.

“This problem is aggravated by the unilateral and restrictive measures taken by certain countries, like India, to limit exports of critical Raw Materials or Semi-Finished Products- this is the case of Cotton Fibre and Cotton Yarns. As a consequence the Price of Cotton which was 84,15 cent $ per pound in July 2010 reached 243,65 cents $ in March 2011”.

The problem is not limited to Cotton and affects other Textile Raw Materials, being natural or Man made. Overall Price increases range from 35% to more than 100% between December 2009 and December 2010 and the situation has deteriorated further in 2011. Mr. Paccanelli mentioned other elements which are also playing a key role in the market disturbances “The financial capabilities of countries like China promote extensive buy and stock pilling strategies to support local industries and the increasing speculation and intervention of the financial operators in the commodities market”

In this difficult environment T&C companies are facing huge cost increases that need to be passed on to their customers, being private or public, but in parallel Euratex demands for concrete actions to be taken at EU and International level.

Among these actions Mr. Paccanelli highlighted that in the short term the EU should“(a) Address urgently the restrictive measures taken by Third Countries to prevent/limit our access to raw materials both at bilateral and multilateral levels; (b) Implement strict market surveillance measures with the aim of limiting the intervention of speculators by improving information exchange and transparency regarding production, consumption and stocks and approaching the physical and derivative markets”.

Considering the complexity of this problem Euratex believes it should be dealt with in an integrated and coordinated way involving the EU Commission, Member States, the Industry and other relevant stakeholders. Euratex President made a clear statement in this respect by saying that “In the short to medium term we should be able to develop a comprehensive policy approach covering trade, development, skills, research, innovation and internal market measures”.

Trade has a central role in the actions proposed by Euratex as our companies need to have a consistent and secured access to Raw Materials. To achieve this critical objective we need to prevent all measures taken by Third Countries to limit or restrain Raw Materials exports being those in the form of Export Duties or Export Quotas.

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