26 February 2022, Mumbai:
The invasion of Ukraine by Russia is creating a tailspin in the global markets, particularly in the energy sector. Crude oil price is trading about $104 per barrel, which will certainly affect stock markets, commodities, and metal prices.
More importantly, it will have an impact on consumer psyche and their buying power, which is important for the global textiles sector.
Immediate reactions by the United States, the EU, and UK focus on imposing economic sanctions against Russia, which is only going to harden. This will impact crude oil and natural gas prices, as Russia is a major exporter of these commodities to EU nations like Germany.
One may also swiftly see the strengthening of the dollar, which will, at least for the immediate future, see higher prices for imports from the United States. The cotton market, which is experiencing a tight supply, will see uncertainty and added volatility due to uncertain demand and ripple effects from higher energy prices.
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More importantly, as many EU countries depend on wheat and energy products from Russia and Ukraine being the breadbasket for Europe, increased prices of these commodities will influence the overall markets and consumer confidence.
“The market will be more volatile,” stated Velmurugan Shanmugam, General Manager of India’s Jayalakshmi Textiles – a 100% cotton spinning mill with 72,000 spindles creating fine count cotton yarns for the home textiles market.
India exports cotton home textiles to EU countries like Germany, and a crisis in that part of the world will impact textile exports and consumption.
About Author:
Dr. Seshadri Ramkumar is a professor in the Department of Environmental Toxicology and The Institute of Environmental and Human Health at Texas Tech University.
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*Figures mentioned in the above article have been sourced from Cotton Growers article.
