Clothing prices rising in 2011 because of cotton, oil prices
American consumers have gotten used to low clothing prices over the past 10 years. Cheap labor overseas and a low rate of inflation have sustained a prolonged period of deflation in clothing prices. But bad weather, import restrictions and rising global demand are expected to raise clothing prices up to 10 percent in 2011.
Clothing prices affected by cotton and oil
Clothing prices are forecast to trend upward in the coming months, primarily because of a spike in cotton prices. Increasing demand for alternative fabrics and fabric blends have also spiked about 50 percent. The price of polyester, which used to be a cheap alternative to cotton, is also rising. Polyester is a petroleum product, and the price of oil has been rising. Higher prices for cotton and alternative blends are also expected to affect how clothing is manufactured. Consumers can expect to see a higher percentage of synthetic fabrics, such as rayon, showing up on clothing labels. Shoppers can also expect fewer colors to choose from for particular items.
Global pressure on cotton prices
Cotton prices on the world market rose to $1.90 a pound on Feb. 11, an all-time high and twice as much as a year ago. According to the International Cotton Advisory Committee, the previous record for cotton prices was $1.89 a pound during the Civil War. After bad weather ruined cotton harvests last summer in major cotton growing nations such as the U.S., China, Pakistan and Australia, cotton prices began their upward climb. Bad cotton harvests in India, the second-largest cotton growing nation behind China, further crimped supply. Growing worldwide cotton demand as the global economy recovers has added upward pressure on cotton prices.
Huge windfall for U.S. cotton tempered by drought
Retailers are uneasy because they fear rising clothing prices will stem consumer demand that showed signs of revival during the holidays. As clothing prices increase, retailers will be challenged to pass on higher prices to consumers without triggering a loss in sales. But U.S. cotton producers are looking for a windfall and are planting more acreage in cotton. China buys a lot of cotton from the United States, and after a devastating drought in 2010 will rely more on American agriculture. However, a drought is expected to continue into 2011 for major U.S. cotton producing regions.