Cotton Prices Force Apparel Manufacturers to Consider Options

By Jim.Robinson|November 4, 2010

It had to happen sooner or later. With cotton prices spiking to new highs on a regular basis, clothing manufacturers really have only two options: increase their prices or use less cotton in their goods. Fortunately for cotton professionals, the majority seem to be opting for the former, at least as long as consumer demand for the fiber remains high.

At press time, cotton for December delivery increased $0.05 to $1.34 per pound–an increase of almost 84 percent in less than four months. Clothing prices haven’t reflected the rise in apparel manufacturers’ raw materials costs so far, but that is expected to change early next year.

Although retail prices are expected to rise next year by as much as 15 percent, some apparel manufacturers are expected to reduce costs by modifying the product rather than raising prices, according to an article published by Reuters. For example, jeans makers might reduce the number of pockets to cut back on the amount of cotton used, or they could reduce the number of sweatshirts that have hoods, the article says.

While the high prices might be expected to reduce cotton’s share of the market, manufacturers of man-made fibers have been maximizing their profits by increasing polyester prices. The current price of polyester is about 90 cents per pound, but industry experts expect that figure to increase by as much as 25 percent in the near future.