Floods in major cotton producing areas in Australia, Pakistan and China have hurt supply at the same time as demand from China, the world’s largest user of the fibre, is soaring. This has sparked panic buying at mills.
Cotton for March delivery jumped as much as 2.4 per cent to $1.8122 a pound in New York yesterday.
How are Britain’s retailers faring with the price hike
“We’re absorbing the higher fabric costs where possible, but we’ve been forced to increase the price on some of our men’s t-shirt range where there simply wouldn’t be a margin otherwise,” comments Vicki Lockwood, founding director of online fair trade children’s clothing retailer sgt.smith.
“We’re trying to compensate for this by adding value through additional print and branding on that range, since we can do those things in-house in our Peak District studios at low cost. To secure a reasonable price per unit, we’ve also been forced to buy in higher volumes, which has certainly hit our cash flow quite hard.”
Teresa Stedman, managing director of Stedman Corporate Clothing, says she’s already seen three price increases with one major cotton provider that she works with. “Suppliers are now not willing to guarantee prices for any period of time; previously, prices would be held for at least three months, and now it is a matter of days – if at all.”
Stedman says this creates a dilemma when scoping a new project. “We’ll provide a quotation to the customer for a number of staff uniforms or garments, yet by the time we’ve completed the design process and are ready to commence production, cotton prices have increased and the supplier is looking to adjust the original quotation. This is not ideal at all and uses a lot of internal resources with team members having to continually check quotations and pricing updates. We then have to make a decision as to whether we discuss it with the client or absorb the cost.
“Luckily there has been a lot of media coverage regarding the cost of cotton, with many high-street retailers having to adjust their pricing as a result,” she continues. “Therefore our clients are in-tune with what is happening in the market.”
Stedman says she’s advising customers to secure suitable stock levels in advance, avoiding any additional uplift that may be added over the coming weeks and months.
“I can safely say that we’ve never witnessed such frequent increases in cotton pricing,” she adds.