As the price of cotton drops we ask when will this filter through to the price of t-shirts
Online PR News – 23-July-2011 – – Cotton prices have fallen 53% since March 15th. t-shirt printers, wholesale t-shirt companies, and consumers must now be asking “When will these prices filter through to us?” This is a very difficult question to answer, as major manufacturers bought in as much raw cotton as they could during the crisis of late 2010 and the cotton that was purchased at that time won’t be hitting the shelves until late spring 2012. This has left the manufacturers somewhat high and dry as they are reluctant to follow the latest price trends and reduce their prices which would result in losses. One thing is for sure it looks like the quarterly price increases, that the industry has had to endure over the last 18 months have finally come to an end and it is only a matter of time before t-shirt prices start to fall. Starworld clothing has already reduced the prices of most of their 100% cotton products.
Although cotton is the major factor in the price of t-shirts (The price of cotton is responsible for 60% of the cost of a t-shirt) another significant cost is the rise in living standards and wages in the far east which is not only driving up the cost of wages, and therefore production costs but the new found wealth in these regions is also increasing demand for products that were previously exclusively exported to richer economies. This trend is likely to continue and must be offset against any fall in commodity prices.
A less volatile market will be welcome in the t-shirt industry especially the t-shirt printing business which operates on narrow profit margins. The industry has seen a lot of business lost from promotions and marketing companies that like to buy in bulk at the budget end of the market. With the cost of t-shirts almost doubling in 12 months these companies are finding it hard to justify the increases to their clients and are switching to other methods of marketing.
"There's never been this kind of volatility in cotton—ever," Eric Wiseman, chief executive of VF Corp., the world's largest apparel company, said in an interview on Thursday. Cotton prices are still 300
% higher than they were 3 years ago and the recent sharp fall may only be a blip, but as American farmers have swapped their crops back into cotton from soya and the new harvests in Pakistan are forecast to be above target it does look like any global cotton shortages are behind us and we can all start looking forward to cheaper clothing