Supply and Demand – The Cycle of Textiles in Canada

shutterstock_297016295When we think of used clothing, we think of our old jeans or t-shirts that either end up at a local charity thrift store, or cut up into rags for local mechanics. It’s hard to imagine used clothing as a globally traded commodity whose sector contributes billions of dollars to the global economy. Industry categories like cream, credential, rag and shred each have their own commodity price that fluctuates daily and those categories are even further subdivided by item type.

The demand and therefore price for each individual type shifts with consumption and disposal patterns of these items around the world and that in turn will indirectly affect the grander commodity price. Jeans would be a perfect example. Only 20 years ago jeans were king on the international trading market – both stylish and useful, there was an endless need for this commodity.

In part, thanks to fast fashion mass production, the commodity market became flooded with jeans and suddenly we had too many to sell and the price begin to drop. Jeans are in such abundance that entire factory processes have been created to use jeans specifically as raw material to recycle into things like insulation and wool. This is a brilliant use, but understand that in order to get to this volume, companies that once thrived on the international trade of jeans have now gone defunct. Thankfully a new industry has emerged because of green technology, that is hopefully absorbing those lost jobs.

It is imperative that Canada begin implementing green technology as commodity prices in the used clothing sector are dropping drastically. This is leading to a potential crisis as more municipalities are becoming committed to zero waste and implementing dynamic collection models to divert even more of this commodity from the waste stream, and rightfully so. This initiative does have the potential of adding further impact to commodity value. Foresight is required to navigate through this rapidly evolving shift in the industry.

Canadians love fast fashion, and unfortunately on the global market our clothes are viewed as poor quality as a result. Although there are some countries that have closed their ports to used clothing all together, there are others that have not, but have imposed restrictions on clothing specifically from North America because of its poor quality and durability.

Before fast fashion, when good quality clothing was being made in Canada, Canadian used clothing garnered top dollar globally. That is now far from the case.

Other unique categories/challenges listed under textiles:

Camouflage coloured clothing, which is very much en trend in the last few years in North America, is actually banned in many countries because they are used by homegrown militant groups in lieu of uniforms. There is a huge black market for camouflage clothing and they garner an exorbitant price. Organizations like TWD give our partners peace of mind, because we work with CCI that sorts out all camouflage, and guarantees that we do not send it to countries that are facing these issues.

Soccer Balls: we can’t get enough! South America loves soccer balls, and we can’t seem to ever have enough to meet their demand!

Single shoes: there are some countries that will take a single shoe, deconstruct it to bare components and then use those components to create brand-new items. This has become such a popular practice that it has created its own commodity category. Single shoes have been traded on the global commodity market for many many years thanks to this entrepreneurial ingenuity in the developing world. Add single shoes as well as paired in any condition to your textile recycling bag when doing a closet purge!

Political factors that affect the stability of a commodity price are shifting export destinations. Ongoing wars in Afghanistan and Iraq have made trade impossible. Those regions were one of the only ones that had an interest in buying winter clothing, as most trading partners have little use for warm clothing in such climates. Losing those two regions had a definite impact on the Canadian commodity market. New opportunities in Eastern Europe have helped compensate for this dilemma.

Areas that suffer trade and banking embargoes like Iran also present barriers to the commodity market. It is imperative that companies work with organizations that have experience in international trade able to foresee and develop new opportunities in areas newly developed to compensate for political shifts and tides that affect our trade options overseas. TWD’s partnership with global international used clothing trade leader CCI, with over 30 years leading the industry globally offers that peace of mind.

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