Soaring cotton prices could impact cost of clothing

05 Nov 2010

Source: The Guardian
Shoppers could be hit by double-digit percentage increases in the cost of clothes next year if soaring cotton prices do not go into reverse soon, UK fashion chain Next warned this week.  The increase is higher than Next predicted only two months ago – when it said prices would rise between 5% and 8%. Now, after a further 20% jump in cotton prices in October, Next says clothing prices will go up 8% in the first quarter and increases could top 10% by the spring.

The retailer blamed "what appears to be a speculative bubble" for the looming price rises.
The price of cotton has risen by 90% in the past year, fuelled by soaring demand in China, bad crops in India, floods in Pakistan and profit-seeking speculators. It hit another record high today. "The talk of continuing physical demand, late season rain in Indian cotton fields and speculative exuberance propelled the market higher again," Commonwealth Bank of Australia said. Recent figures from the Office of National Statistics showed the first annual increase in clothing and footwear prices for 18 years.

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