As cotton prices reach 10-year record highs, consumers may to consider buying clothes made of other fabrics if they are trying to save money.
According to CNN, prices for cotton increased 22 percent over the past two weeks to levels not seen in a decade by Tuesday, along with a “long list” of commodities and raw materials with spiking prices. In cotton’s case, prices rose to almost $1.09 – the highest they have been since September 2011 – due in to extreme weather such as droughts and heat waves.
A record-breaking heatwave hit the western U.S. this summer, said the National Oceanic and Atmospheric Association. These record-breaking temperatures impacted Arizona, California and New Mexico, three of the 17 states where cotton is grown in the U.S., according to the National Cotton Council.
“It's a shortage situation. The planting season did not go that well,” said Robert Yawger, director of energy futures at Mizuho Securities. Once speculators started to notice the trend, it exacerbated the market, he added.
Another factor contributing to the price increase could be demand for cotton from China, which the National Cotton Council said has historically been the largest grower of cotton.
CNN said this demand could reflect a side effect of U.S.
trade policy. Last December, former President Donald Trump’s administration blocked U.S. companies from importing cotton and cotton products originating in China's western Xinjiang region due to concerns about forced labor.
“Analysts say those penalties, which remain in place during the Biden administration, have caused some Chinese companies to buy US-grown cotton, make goods with it and then sell the products back to the United States and other markets,” said CNN.
Skyrocketing cotton prices could eventually lead to marked up prices for T-Shirts, jeans and other consumer goods made from the material.
In fact, CNN said that prices for apparel were already on the rise before cotton started to go up.
Apparel prices climbed 4.2 percent during the 12 months that ended in August, according to a government inflation report cited by the outlet.
Men’s shirts and sweaters went up 4.4 percent, men's pants and shorts went up 6.6 percent and women's dresses went up nearly 12 percent.
Shipping issues, tariffs and increased demand for clothes after months of COVID-19 pandemic-related lockdowns may contribute to the rising prices, according to Forbes.
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