Blog: Leonie BarrieCotton cost crisis continues

Leonie Barrie | 14 February 2011

Demand for cotton pushed prices for March delivery to record highs last week - as a report showed global supply is likely to remain lower than demand and India hinted it will retain its current export cap of 5.5m bales.

The surge in futures prices seems to be supported by figures from the US Department of Agriculture (USDA), which has lowered its world production estimate by 205,000 bales, from 115.5m bales to 115.3m bales, on a likely lower harvest from Uzbekistan. World consumption, meanwhile, is calculated to remain at around 116.6m bales.

The latest indications are that the Indian government is also unlikely to make additional supplies available, with Textiles Minister Dayanidhi Maran saying that "not a single bale" more than the 5.5m already approved for exports would be shipped.

"Higher than previously projected" cotton costs also prompted T-shirt and underwear maker Gildan Activewear to warn it may be forced to raise selling prices again in the second half of the year.

Meanwhile, rising prices for products sourced by US companies from China are threatening the country's position as a low-cost supplier, a new survey says. The poll by Global Sources found China's apparel makers are losing out to countries such as Vietnam. But buyers said they would still turn to China for orders with demanding specifications or tight schedules.

For Arafa Holding, Egypt's biggest garment exporter, production is back to full capacity after two weeks of political unrest in its home country. The company, which makes clothing for Zara, JC Penney, Macy's and Gap, says none of its orders have been cancelled and that product shipments by sea and air have begun again.

Sri Lanka's apparel industry is planning to launch a recruitment drive to hire enough workers to help it meet projected export growth. The industry wants to increase export earnings to US$5bn by 2015, from its current level of around US$3bn, with factories also preparing to expand into the north and east of the country.

With apparel retailers and brands looking for new ways to bring down their buying-in prices, now could be the time for Radio Frequency Identification (RFID) to finally come into its own. Costs are coming down, suppliers are beginning to collaborate, and benefits could include better management in garment factories.

Indeed, the growth in RFID item-level tagging in the retail sector is being driven by apparel firms, new research has found, with deployment only being held back by the state of the global economy. More than 750m RFID tags are expected to be used in global apparel markets in 2011.


BLOG

just-style market research sale

Are you planning for the year ahead and beyond? Well this week we’re offering great deals on some of our market research......

BLOG

Gearing up for the holiday shopping season

The volume of US apparel imports saw an increase in October on the prior year as retailers geared up for the holiday shopping season. Bangladesh booked the second highest growth behind India, reversin...

BLOG

Innovations to boost sustainability

Hong Kong-based textile and apparel giant Esquel Group, the world's largest woven shirt maker, is pushing ahead with the pursuit of sustainable and holistic quality. ...

BLOG

Sign up to try new re:source apparel sourcing tool for free

The old saying "Good things come to those who wait" is certainly true for re:source, the new suite of data-driven sourcing tools being developed by the team here at just-style....

just-style homepage



Forgot your password?