THE COTTON PRICE IS RISING – HERE ARE THE FACTS
Cotton prices have seen a major increase worldwide rising 20% over the past two weeks, from 62 cents to 82 cents per pound. As professionals in the furnishing fabrics industry, we thought we would shed some light on what is driving the increase, what we predict for the upcoming season and what we are doing to minimize impact of the recent price hike.
SO, WHAT’S FUELLING COTTON PRICES?
Interestingly enough, it is not demand fuelling the current increase in cotton prices. As it is still too early in the season, there are currently no orders for finished product out in the market.
For now, the increase is based solely on speculation of a potential cotton shortage surrounding reports that both India and Pakistan are facing a shortfall due to crop damage in major producing states.
The true validity of these reports will only be tested once the new cotton crop hits the market in late August/ September of this year.
The outlook is still quite positive at this stage, whilst the cotton market is still bullish amidst rumours of a shortfall, we are still expectingprices to stabilize by the end of September when producers will know actual crop yields.
On Wednesday, the Cotton Advisory Board lowered the initial forecast it had made in February, saying the picture was now becoming clearer as we approach harvesting season.
THE GOOD NEWS
After consultation with suppliers it is very evident that the industry remains positive that it is nothing more than speculation driving price hikes.
Furthermore, we are fortunate to have three month contracts in place with the majority of our cotton suppliers, allowing us to maintain pricing on cotton goods for at least the next quarter.
Whilst cotton is susceptible to market price fluctuations, the fact that it is a natural fibre means it is a preferred fabric due to it's many wonderful characteristics such as it's strength, breathability, good absorbency and colour retention, making it a fantastic base for prints. Cotton is also easy to work with and sew, as well as being know for its wonderfully comfortable, soft hand. While prices on our current ranges remains unchanged we're celebrating all of our new 100% cotton collections online here.
We will continue to keep customers updated on developments in the cotton market.
The SG Team