Middle East conflict may hit India's polyester, viscose supply chain
The escalating US-Israel-Iran conflict poses a serious threat to the textile value chain in India and worldwide. Iran's Parliament has unanimously approved a proposal to close the Strait of Hormuz—a vital maritime corridor linking the Persian Gulf with the Gulf of Oman and the Arabian Sea. Such a move would severely disrupt crude oil shipments, driving oil prices sharply higher and inflating polyester production costs. The closure would also trigger a steep rise in shipping freight rates, further straining the supply of viscose, non-cotton, and cotton yarns and fibres.
Indian polyester fibre and raw material manufacturers have already increased prices significantly due to the surge in crude oil prices.
US-Israel-Iran conflict and Iran's move to close the Strait of Hormuz threaten global oil trade and India's textile value chain. Crude oil and freight costs are rising, prompting sharp hikes in polyester and viscose fibre prices. Indian PSF prices rose by ₹3.50 per kg, with further increases expected. Supply disruptions and higher raw material costs may strain synthetic yarn producers.
Last week, one of India's leading producers raised polyester staple fibre (PSF) prices by ₹3.50 per kg, effective from June 21. Current PSF prices are: 1.4 denier (Den) at ₹103.50 (~$1.19) per kg, 1.2 Den at ₹104.25 per kg, and 1.0 Den at ₹105 per kg (exclusive of 18 per cent GST). The company also raised raw material prices for texturised yarn by ₹3–4 per kg.
Market sources indicate that most spinning mills have started quoting higher prices. Others, initially hesitant, are now also increasing rates. It is expected that all mills will raise polyester yarn prices by ₹3–4 per kg. Last week, traders had forecast a further increase of ₹1–1.5 per kg.
Polyester fibre and yarn producers in India had already raised prices in response to last week's crude oil surge following the Israeli attack on Iran ten days ago. However, the latest developments—direct US attacks on Iran and Iran's announcement to close the Strait of Hormuz—carry even more serious implications for crude oil and the global textile supply chain.
In 2024 and the first quarter of 2025, the Strait of Hormuz accounted for over one quarter of global seaborne oil trade. Due to its geographical importance, there is no viable alternative sea route, posing significant threats to global oil and LNG supply chains and causing prices to soar.
R K Vij, emeritus president of the Textile Association of India (TAI) and secretary general of the Polyester Textile and Apparel Industry Association (PTAIA), told Fibre2Fashion , 'Due to last week's increase in crude oil, the industry has hiked prices of PTA and MEG. Downstream industry has also increased ₹3.50 per kg in PSF and ₹4 per kg in yarn and filaments.'
'Looking at the season ahead, the price rise has been absorbed, and user industry has lifted the prices of their products. If Israel-Iran conflict continues, oil prices can further increase, thus making the fibre yarn filament further costly,' he added.
Dr Jay Krishna Pathak, president of The Bombay Yarn Merchants Association and Exchange Ltd told F2F , 'We might see crude oil prices skyrocket, which may lead to a further increase in synthetic raw material costs. Prices have already witnessed a steep rise in the past week. It will be difficult to absorb the price hike under the current market conditions. Polyester yarn demand will improve when fabric lifting picks up and payment conditions improve.'
The Middle East conflict and possible closure of the Strait of Hormuz could also lead to a steep rise in shipping freight charges, further fuelling viscose yarn prices. India's industry is heavily reliant on imported viscose yarn, mainly from China. A Mumbai-based trader noted that demand has risen ahead of the festive season. If freight rates increase, imported viscose yarn prices are expected to climb further in the coming weeks.
Fibre2Fashion News Desk (KUL)
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