"Energy spread widens as textile export margins shrink globally", 19 May 2026

A widening gap between industrial energy costs and apparel export realisations is becoming one of the defining stress signals in the global textile industry, with manufacturers across Asia facing rising electricity and gas expenses even as export pricing remains weak.

The imbalance is particularly visible in export-oriented textile hubs...Industry estimates show energy now accounts for 18-35 per cent of textile processing costs, while garment export margins in major sourcing economies remain largely stuck...

Polyester accounts for roughly 55-57 per cent of global fibre consumption, making the industry heavily dependent on crude oil and petrochemical feedstocks.

Industry benchmarks indicate:

• A 10 per cent rise in crude oil can trigger a 6-8 per cent increase in polyester costs
• While oil-driven freight spikes can push container rates up 30-40 per cent during peak periods
• Yet downstream apparel exporters continue facing resistance from global brands on FOB price increases.

[...]

The problem is no longer just high energy prices; it is the inability of exporters to transfer those costs downstream. Retailers in the US and Europe remain focused on inventory discipline, promotions and price-sensitive consumers. As a result, suppliers are increasingly absorbing: higher electricity costs, gas-linked fuel inflation, freight volatility, and sustainability compliance spending...

Unless global apparel demand improves meaningfully, the energy versus export margin spread is likely to remain elevated through 2026...

The biggest risk for textile exporters now is not simply losing orders but winning orders that generate little or no margin.