Italian Textile And Leather Industry In Crisis, Raw Material Prices Facing Upward Pressure

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? ? ? Marino vago, President of the SMI sistema Moda Italia, and Fabrizio Nuti, President of the Italian Federation of tanneries, have jointly warned that the overall rise in commodity prices has hit the fashion supply chain.

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? ? ? The data show that the soaring purchasing costs have put textile and leather enterprises in a dilemma, and these enterprises are facing the most complex test: the downstream fashion brand customers, their procurement costs increase. Given weak consumption and sluggish production of clothing and accessories, it is difficult for customers to understand the reasons for the price increase.

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For the textile industry, SMI's latest analysis shows that the price of February increased by an average of 5.9% compared with January, with the highest increase of 7.6% for cotton, 7.2% for Australian wool and 7.3% for synthetic fiber. The trend is sure to continue, vago said“ Companies are very worried that the growth of some chemicals has reached an unsustainable level, as high as 130%. In addition, we are also facing a shortage of raw materials. "

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The situation in the leather industry is just as complicated. UNIC's analysis shows that the price of imported wet blue cattle has doubled (+ 122%), and Brazil is one of the most important producers of medium and low-grade leather. Spanish sheepskin, used for luxury footwear and leather goods, has also risen 70% in the past six months. In addition, the price of medium-grade cowhide has been rising for eight consecutive months. Since the beginning of 2021, the average price has increased by 13% and 36% compared with last summer. UNIC also pointed out that transportation difficulties also led to a relative increase in logistics costs.

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Fabrizio Nuti said: "in this already difficult economic period, tanners are facing a surge in leather prices: almost always double-digit increases, and sometimes far higher than pre epidemic levels." This unexplained sudden rise can be attributed to factors such as the market no longer tends to use leather, the use of alternative materials or inferior leather. Textile and leather prices rose for similar reasons. In 2020, textile companies will reduce inventory to cope with the loss of orders. As the Italian supply chain relies on foreign supplies, which cannot be delivered within a short period of time, the procurement competition of textile and leather enterprises has begun, especially under the competitive pressure of Asian counterparts.

? ? ? ? As far as the leather industry is concerned, the forced closure of restaurants has resulted in a low slaughter rate, making the situation more complicated. "The decline in profit margins puts pressure on performance and exacerbates the already shrinking sales and liquidity issues in 2020," Nuti said. All we can do is intervene in the price of finished products. "

? ? ? "Raising prices is a necessary option because the supply chain is no longer profitable," vago concluded. Of course, we can't save on raw materials, because the market has the highest expectation for the quality of Italy. French fashion brands have said they are willing to sacrifice part of their profits for the highest levels of service, quality, timeliness and partnership. The Italian supply chain must remain intact, while protecting Italian brands. " ?