Prices of Cotton Used in Polo Shirts Falls

Thursday 25th of September 2008 03:32:46 PM

Prices of Cotton Used in Polo Shirts Falls

Cotton prices fell significantly over the last week for a couple of reasons. First, the cotton prices fell because other commodity prices began falling. Second, there was a surplus of cotton on the global market. Third, the price of cotton fell because of falling consumption around the world.

The glut of cotton in the world market caused the price of cotton to fall below 65 cents for the first time in a long while. Before the falling prices, cotton was sold at 67 cents.

The excess cotton supplies were not a surprise to those following the cotton industry. The USA produced record cotton crops and prices actually began falling in anticipation of the additional cotton production. Also, demand for cotton has fallen due to the declining economic conditions in many countries.

The good news is that it appears cotton prices have stabilized at 63 cents even though that is lower than was hoped for. Cotton is a staple of the clothing industry and is used in a variety of clothing including underwear, t-shirts, dresses, skirts and all other fashion wear. But cotton is used in many other industries also including the paper and textile industries. When cotton prices fall, it impacts a number of manufacturers and retailers.

The USDA estimated the global cotton crop would be at 112 million bales. The next fiscal year the cotton bale estimates are set at 123.7, but there is expected to be a decline in cotton consumption. The report said that Chinese cotton production would remain stable, and the Pakistani cotton crop is expected to decrease. The Indian crop, on the other hand, was expected to increase and would offset the decreased production in Pakistan. In addition, the estimates of Chinese imports of cotton was lowered which means less cotton exports for the USA.

It remains to be seen how the cotton production is going to affect retail prices. You can already buy clothing such as sweatshirts and Polo Shirts made of cotton at remarkable low prices.