Apparel set for price rise as cotton soars

Cotton futures raced past $1 a pound (U.S.) for the first time in nearly a decade as adverse weather and shipping snags threaten supplies, driving up costs for apparel makers such as Levi Strauss & Co.

In New York, the contract for December delivery climbed to $1.005 a pound, the highest since November 2011. The price has surged 28 per cent this year as torrid demand, especially from China, combines with disruptions to supplies from the pandemic and logistics chaos spurred by rising freight costs.

The higher fibre prices mean that the costs to make clothing will be on the rise. Retailers may try to pass those expenses on to customers, resulting in inflation for everything from Tshirts to jeans.

Cotton is projected to see a second straight world deficit, and China, the top user, needs new sources of the fibre for its textile industry amid international backlash about labour violations in Xinjiang, its biggest producing region.

Other key growing countries such as Bangladesh, Pakistan and India are having crop problems. Mexico, a major buyer, is set to purchase the most American fibre in 11 years. U.S. exports in the 2020-21 season ended in July were the highest in 15 years at 16.4 million bales, spurred by record global imports.