Cotton prices rise on demand, disasters

Jeff Tyler Aug 17, 2010
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Cotton prices rise on demand, disasters

Jeff Tyler Aug 17, 2010
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STEVE CHIOTAKIS: We’ve been talking about skyrocketing prices in global commodities lately. And cotton is the latest to see its prices jump. It all comes down to supply, demand and… global natural disasters.

Marketplace’s Jeff Tyler explains.


JEFF TYLER: Floods and landslides damaged the supply of cotton coming from China — the world’s largest cotton producer. And the horrific floods in Pakistan destroyed about a third of that country’s crop. Global inventories are running low. At the same time, consumers in China and India are buying more clothes, so demand for cotton is rising.

MIKE STEVENS: The mills are scrambling, trying to find supplies, and that pipeline is empty right now.

That’s independent cotton analyst Mike Stevens. He says supplies will remain tight until the harvest in October.

STEVENS: It’s going to be a good year for cotton farmers in the United States.

But it’s not such a good year for manufacturers. For companies like Hanes and Levi Strauss, higher cotton prices add up to millions of dollars in extra expenses.

Stevens says apparel companies will pass along those higher costs.

Stevens: Our days are numbered as far as cheap clothes.

He expects retail prices for clothing will get more expensive — just in time for the holiday shopping season.

I’m Jeff Tyler for Marketplace.

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