Thursday, April 7, 2011

The rising cost of cotton

Interesting article on this morning about the rising cost of cotton.
Cost of cotton drives up clothes prices - The Boston Globe

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The article describes how the cost of cotton has skyrocketed in the last few months, and that for the first time since the 90s, retailers will either need to pass this increase on to costumers or cut corners to reduce costs. There is an predicted 10 - 20 percent increase in clothing due to the rising costs of producing cotton and other resources...

"The apparel industry was hurt after poor weather hurt cotton crops in China and Pakistan over the past several years and speculators then cornered the market. Demand far outstripped supply, and prices skyrocketed. Cotton hit a record high of $2.44 per pound on March 8: last year, cotton averaged about 77 cents a pound."

However interestingly enough, the article mentions that some think consumers are willing to pay more for clothing:

"Cotton Inc. said a new survey revealed that consumers would be willing to pay more than 20 percent above the average price for a pair of jeans and T-shirt, if necessary."

So what this means for eco-fashion? Well I think the fact that they think consumers are willing to pay a little more for clothes instead of sacrificing quality is an overall good thing. Maybe down the road when eco-friendly fashion has become more popular, the average consumer will be able to justify the increased cost of that product for its materials and quality.

But will the increase in the cost of cotton affect the cost of organic cotton as well? According to this article I found from printwear magazine, it's uncertain. It seems that as the cost of conventional cotton rises, it closes the price gap between conventional cotton and organic cotton, which is great (can you imagine if there was no price difference!). However often organic cotton's prices are determined by adding a premium to conventional cotton, which would essentially mean that as conventional cotton prices rise so will those of organic cotton.

“We believe that the price differential for organic cotton is going to increase above conventional but not by as high a percentage as in the past... It could be a differential of twenty-five to thirty percent, but not the fifty percent it sometimes was in the past. It is important to realize that there are no fixed international rules that benchmark organic cotton prices. Rather, prices are fixed by market conditions and commodity traders” -Dale Denkensohn, president of econscious (from printwear article)

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I'm very curious to see how the increase in conventional cotton could affect the fashion industry. Will people actually be willing pay more for clothing? Will consumers start to steer away from fast-fashion? Will the price gap between conventional cotton and organic close up? I guess we shall see!

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