Supply and demand20 December 2022
Shortage of labour, natural and man-made disasters as well as negative post-Brexit attitudes in Europe are all factors to be dealt with in 2023. But it is not all bad news on the linen trail
Linen supply has been hit with the quadruple whammy of climate change, Brexit complications, Covid and the Russian war of Ukraine. The Pakistan floods are a recent example of how a natural disaster, which experts are attributing to climate change, can skew the market and prices. As we heard from suppliers to the NHS (see opposite), lead times on orders have stretched from an average of 12 weeks to up to 20 weeks.
Suppliers say that the extra paperwork is making things more complicated post- Brexit and that Brexit is also a factor in supply chain delays. Shipping does not always end up in the port it was originally destined for so a consignment that, in previous times, could be expected to arrive in Southampton could very likely end up in Frankfurt. Because of bad feeling at European ports over Brexit, agreed NHS suppliers, these consignmentsi are often ‘prioritised’ to the bottom of the queue. Hopefully, over time, attitudes will change and imports will get back on track but it seems that is not the story right now.
One of the big supply downsides – the log jam of containers stuck in various ports due to lockdowns – the biggest of which has been China – has, however, begun to ease and prices which had rocketed have now started to come down.
Cotton prices have been all over the place, too. In the USA, a major cotton producer, as LCN went to press, at the end of November, a market report from Trading Economics, said: “Cotton futures remained near the 85 USd/Lbs mark, not far from an almost 22-month low of 71.6 last month and about 50% down from their May peak, pressured by lingering demand concerns due to challenging economic conditions and rising supplies. In its latest monthly report, the US Department of Agriculture showed biggerthan- expected domestic production and lower global demand estimates for 2022/2023. Production in the US is seen 1.5% higher, at 14.0 million bales, as a decrease in the Southwest is more than offset by increases elsewhere. On top of that, global cotton consumption is projected to be 650,000 bales lower this month, with a 300,000-bale cut to mill use in Pakistan and Bangladesh.”(https:// tradingeconomics.com/commodity/cotton).
LCN caught up with Tradelinens’ Catherine Morris for a snapshot of what is happening in the hospitality sector. Tradelinens supplies top end UK hotels with luxury linen and has recently entered into a partnership with Casarovea, a brand of respected Italian textile manufacturer, Parotex, to become the UK’s sole supplier of its luxurious table, bed and bath linens.
In general terms, says Morris: “Cotton production and lead times have broadly returned to pre-pandemic levels, however pricing remains more volatile, but we continue to work with our partner mills to manage this with the least impact.
“Cotton pricing has been fluctuating a lot recently, but it is only one part of the overall cost of the finished items and shipping and labour remain higher than pre-pandemic. Feedback from UK hospitality clients is that they are at good occupancy levels and welcoming back overseas travellers both for leisure and business. The real challenge remains the continued labour shortages and the high utilities costs with no news on how the Government will support business post- April 2023. We’re hearing a more positive message from our clients and as such we’ve seen a good return to sales.”
As for challenges to be expected as we head into 2022, she says: “Into the New Year, I think the challenges are around the continued uncertainty with regards to the cost of living driven by huge increases in energy prices. Hotels are expensive to run and guests are being more cautious with their spending so it’s potentially a challenging time again for the hospitality sector with pressure to increase rates against a backdrop in contracted consumer spending.”