Geoff Krasnov offers apparel/clothing/garment manufacturing and sourcing news.

Thursday, March 06, 2008

Cotton Pricing Soaring, Adding to Industries Miseries

Compounding the ongoing issues with price escalation due to the lagging dollar and rising petroleum related pricing comes news that cotton futures have reached a price level not seen for the past 7 years. From mid-year 2007 to now pricing has increased 65%, from $.55/lb to $.90. Much of the blame was being placed on Chinas growth and demand for fiber, but more recently has been impacted by the speculation market, which has driven nearly all grain and fiber pricing higher as plantings for bio-fuels increase, taking the place of commodities like wheat and cotton. The impact is being felt at the grocery stores as well as at the mills, who have been reluctant to pass on increases but have no place to go with this type of escalation than to push it forward. Basic 18/1 cotton yarn has risen from mid $.80s to the $1.05-$1.10 range, with another increase in the horizon. Yarn producers have taken a big part of the increase on the chin, but that can't hold for long.

Style Source uses cost averageing to accomodate yarn market fluctuations. We have not had a wholesale price increase for 3 years. This has been accomplished by planning for increased pressure and insuring our structure is resilient enough to accomodate market disturbances. We all have limits ,however, and further escalations of material costs may have us pointing back to this blog with a deep sigh.

Tuesday, March 04, 2008


As an extension to my previous blog, we are now 5 months later and have seen further erosion of the dollar. Since December, the dollar has devalued from 10-18% against most worldwide currencies. This is a triple whammy. First, everything imported costs more just due to the exchange rate. Second, oil pricing is dollar based, so everything related to petroleum(transportation, synthetic fibers, plastics etc) are rising in cost. Third, many nations are turning their attention to Eur-Asian countries and domestic markets, shying away from the dollar altogether. Exacerbating the issues, Chinas recent labor law changes have forced many layoffs and factory closings. Additionally, the Chinese government has regulated the flow of loans to higher tech, higher wage industries and away from apparel. This has caused a reduction in capital expenditures and the closing of many companies that cannot obtain needed funding. Eyes are turning back to our domestic market, of which the decimation of years of unfair trade laws have left a shadow of mills and capable LEGAL sewing factories. I emphasize legal, as as many as 70% of all small sewing factories left would be found in violation of OSHA , labor laws or workers comp accredidation. This is the natural consequence of haveing to try to compete against low wage countries that have little regulation or labor laws.

Style Source Inc works only with certified compliance factories, and has weathered alot of the storm. Our private label apparel manufacturing, custom apparel design, apparel pattern making and marking services and custom screen printing and embroidery services continue to provide our custoers with creative energies to enter the apparel field at the most reasonable possible thresholds. Call us at 910-399-2288 to discuss your needs, whether domestic or overseas.