Monday 9 May 2011

Why is silk so much more expensive theese days... Or why stuff around the world matters to you!

In recent times the world has been in upheaval. Riots have spread  across the Middle East and Africa and we have seen storms floods and earth-quakes across the globe. During such times I'm often glued to the internet. Not out of a macabre  twist though, but out of a genuine interest in how we cope with such things and how we help each other. Some people berate me for such activities though. I often here the words "it doesn't matter to us, it's so far away" bleated at me. The same people are often the first to complain when such things DO effect us. Let us use silk as an example.
  Silk has never been the cheapest of fabrics, however it's currently skyrocketing in price. Silk has gone up by as much as threefold in recent months and the reasons for this are nothing to do with the greed of retailers OR their suppliers. It boils down to 3 main factors (but there are even more.

a) Flooding in India and the surrounding area

b) Climate change

c) Chinese economy increasing.

The floods in India may not have necessarily  hit the silk gathering areas, and indeed India is not the most significant source of silk cocoons. However the strain on the infrastructure there caused  by the flooding has dramatically reduced their harvest.

Whether you believe in Man Made Climate Change or not, the fact the climate has changed in some countries is a matter of record. In Indonesia and Thailand the change in climate has reduced the yield and quality of the Mulberry trees that feed silk worms. As a result each silk worm is spinning less silk in their cocoons. This has dramatically reduced the yield of a major supply source.

The Chinese economy is expanding. However there was a downward blip in the price of silk 5 years ago. As a result some areas slowed down their investment in the industry whilst others even began digging up Mulberry trees. The prices then began to rise fast.  The silk mills began buying up all the silk they could find, both home and abroad. The silk producers  hit by the downward trend and concerned about their businesses stopped the practice of deferred payment, insisting on being paid on delivery (or even a season before hand). As a result the mills had to increase their prices again to cover from paying a season BEHIND  delivery to suddenly paying AHEAD.  This coupled with the Chinese currency (Yuan) no longer being tied to the US Dollar but now gaining strength  has meant that produce from China is now beginning to cost more.

In short :-
There's less silk cocoons
What cocoons there are smaller
China is expanding and buying and using more silk from around the world
It is costing more to move the silk round the world.

I was going through this whole story with a customer at work. She had what can only be described as a 'light-bulb' moment as she explained that on her last trip to  Indonesia she felt that something had been missing. The local silk market.  So the next time you see some world event on the news, be it big or small feel free to have your own views, but be wary of saying "It doesn't effect us"

No comments:

Post a Comment