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

Complexities of multi-channel pricing, sourcing and stock control

The fashion industry is operating in a multi-channel world – but when it comes to managing this approach, it seems there is no unanimity of best practice (and often no best practice at all) on multi-c...

BLOG

Fashion firms struggle on speed to market

Fashion firms are continuing to wrestle with the challenges of taking decisions quickly and meeting deadlines – and admit they are struggling to speed their go-to-market processes to keep up with fast...

BLOG

Why cotton is being battered on all fronts

Cotton is being battered on all fronts, from false information campaigns, to competition from synthetic alternatives, and a changing consumer. The challenge now facing the cotton industry is how to re...

BLOG

New businesses shaking up a broken retail model

The convergence of disruptive new technologies, easy access to cheap capital, and changing consumer attitudes are shaking up an already-broken retail model, according to speakers at last week's IAF Wo...

just-style homepage



Forgot your password?