Impact Of Cotton Prices On Textile Industry

cotton-picture

Cotton is commodity which never loose its important. And all the textile products heavily depend on cotton crop and its prices. There are main 5 main countries whose cotton has worth in the international market. Pakistani cotton has no match and every textile production country wants to buy Pakistani cotton. Then china, India, USA and Bangladesh are the main countries that hold the international market in the cotton section.

Recently the prices of cotton increases and the textile products rates also increases.
So lets check out the why the cotton prices increases

According to U.S. Department of Agriculture (USDA)

• In the beginning August 2010, there is 3% increase in textile products globally.

• The other thing which affects the cotton prices is USA farmers shift from cotton to grain crops as cotton is not giving them the handsome income.

• China which produce the cotton at large scale. it does not meet its target and production decline as compared to 2009 cotton production.

• Now the main cause of all time high prices of cotton is floods in Pakistan. The world’s largest and finest cotton producer country looses its crop. And this fear increases the prices of cotton 15 years high level.

• The other key player in cotton production India stop its cotton export to fulfill the local demand

As the prices of cotton increases the textile producers also increase their rates. And it cause inflation in many countries.

cotton-prices-chart

Let’s see what the main brands said about the increase of cotton prices

According to Bloomberg

• Gap incorporation and J.C Penney Corporation pay 30% extra to china due to recent hype in prices of cotton.

• A sales manager of Suzhou Unitedtex Enterprise Ltd said that it’s frightening to deal with cotton suppliers

• Jessica Lo, Shanghai-based managing director at China Market Research Group said that American buyers are used to buy high priced cotton products at wal-Mart stores but in china the trend of buying is compressed not only due to cotton price but also due to real estate and labor cost.



cotton-supply-and-demand-chart

• Sales manager Fred Hu of Shandong Zaozhuang Tianlong Knitting Co., which makes Polo t-shirts and track suits has increased its prices 70% from a year earlier.

In short these cotton prices have disturbed the textile industry around the glob.