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

Wednesday, February 16, 2011

Cotton hits $2 a pound, Chinese minimum wage rises

For the first time in history cotton fiber reached $2 a pound in active markets. This is an increase of another 12% since last month. In the meantime, India announced it will not export any cotton this year, severely impacting Pakistans effort to boost supply and causing Pakistan to announce it will be seeking an additional 2 million bales to cover its internal domestic needs through June. China is experiencing the worst loss of labor in decades, with nearly 50% of factory workers not coming back to work after the Chinese New Year. This is due to increased urbanization in rural areas (creating jobs closer to home) and a shift from low margin, low value products (textiles) to higher margin products like electronics and pharmaceuticals. In an effort to woo them back, China announced an increase in the minimum wage. This will inevitably lead to higher costs of Chinese apparel imports.

Wednesday, February 02, 2011

Chinese Hoarding - The Latest Price Stimulus

Reports from China tell of warehouses full of cotton, and many independant farmers filling their shacks and outbuildings with fiber in anticipation of even higher prices. With nearly 25 million Chinese cotton farmers, it is estimated that as much as 9% of the worlds supply is being held back.

In other news, Hanesbrand has announced an impending increase to offset lower revenues of single digit to up to 30% on certain products.