Finally,Cotton May Have Peaked!

Latest word on cotton futures pricing is that it has levelled off with anticipation of declines through December. Plantings are up worldwide and, barring natural catastophies, blight or aliens absconding with the new crop it is anticipated supply will increase enough to impact pricing. For the first time in 10 months we were able to purchase yarns at the same price as the previous month. Although incredibly high, at least it was not another double digit increase. Be advised that our buying position is short, as we wish to pass on any price drops as quickly as possible. To do so, we must minimize inventories and jeapordize deliveries. We normally carry 7-10 weeks of finished goods inventories, but currently have targeted 5-6 weeks. This is particularly difficult with yarn deliveries being spotty and finisher schedules running short time due to lack of demand. As is usually the case, expect prices to drop much more slowly than they rose. We are hoping to begin trimming surcharges late in the third quarter (September) as we work through more expensive inventories. Stay tuned for future postings!