Cotton Prices Going Up - Details

More on my post from December 29 about rising cotton prices. The details of this come from an online article put out by the Advertising Specialty Institute (ASI) last week.

Higher demand and recent poor weather in Asia have driven up the price of cotton, an increase that industry experts say will be felt by consumers within three to four months. Additionally, world cotton production is now expected to fall short of demand in the current crop year, which runs through July 31. "It's not something anyone can run from and there's no place to hide," says Rainer Friedrich, vice president of production at industry supplier, Charles River Apparel. "There won't be a price change until there's a leveling off and the demand evens out. That could be six to eight months from now."

According to Friedrich, in just the last two months the price of cotton produced in Pakistan has jumped by 40%. Overall, the cost of cotton has increased roughly 15% globally. "In general, consumers will pay more at some point," says Friedrich. "By March or April, the effect will be there. Manufacturers will try to spread out the increase, so there may not be a large difference at first. Distributors will probably have to charge more."

Because a larger number of apparel items, like polo's, are now commonly offered in synthetic fabrics, the greatest price volatility is expected to occur among suppliers that produce T-shirts. "In our industry, it probably affects the wholesalers more," said Chris Clark, vice president of sales at Ash City, another industry supplier. "When we use cotton, our pricing stays fairly consistent since we buy on the futures market."

Despite the surge in the cost of cotton, Friedrich believes there is a twist of good news to consider. "It means the economy is coming back," he says. "Demand for product is going up and you have to stock the shelves."

My take: It looks like we will see prices on T-Shirts and probably wearables in general creeping up a bit come the spring. T-Shirt prices tend to fluctuate week to week, much like commodities, so those figure to be a bit more 'fluid'. Not so however with polo's, jackets and other forms of apparel. The prices for those generally are set the previous fall and won't change midstream unless the suppliers are forced into it.

So if T-Shirts are in your budget for 2010, you may save some money by ordering them 1st quarter and holding onto them till needed. How much is difficult to project but if I had to guess, possibly 10-20%, at least for the short term, may not be out of the question. But this of course is subject to change and sometimes without notice. I will continue to monitor and post updates on this blog if there's anything new to report.

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