Rising Polyester Prices Pose Risk to Polish Clothing Firms; Impact on Consumers Unclear

Clothing companies in Poland face growing risks from rising polyester prices, a key raw material derived from petrochemicals. The increase is directly linked to geopolitical instability, particularly tensions in the Middle East, which have driven up crude oil prices and subsequently polyester costs. Dom Maklerski BOŚ, an investment firm, highlights this as a significant concern for the apparel sector.

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Indeed, in recent months, we have observed a rise in polyester prices on the global market, primarily due to the geopolitical situation and rising costs of petrochemical raw materials, which are a derivative of changes in the crude oil market.

Ewa Janczukowicz-Cichosz, a sustainability expert at LPP, which owns brands like Reserved and Sinsay, confirmed the global rise in polyester prices. She noted that while the overall impact on material costs for LPP's production is not yet substantial, the geopolitical situation creates market uncertainty. In contrast, Andrzej Tabaczyński, president of Arlen, a producer of specialized fabrics, reported that polyester yarn price increases of 20% translate to a 5-10% rise in fabric costs, depending on the material's weight and specifications.

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The tensions in the Middle East are particularly significant, increasing uncertainty and affecting the prices of raw materials used in the production of synthetic fibers.

Krzysztof Bajołek, head of e-commerce platform Answear.com, suggested that companies focusing on the premium market are less affected. These brands often use more luxurious materials like cotton, linen, silk, and wool, which are not directly tied to oil prices. However, for companies offering lower-priced apparel, the increased cost of polyester could lead to higher prices for consumers. The extent to which these rising costs will ultimately affect consumer prices remains a key question for the industry.

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With a 20% increase in the price of polyester yarn used in fabric production, the price of the fabric increases by about 5-10%, depending on its weight and other parameters.