The cost of t-shirts and jeans could become more expensive after cotton prices hit a 10-year high last week as extreme weather devastated the United States’ cotton crops.
The price of the commodity rose 22% last week.
Cotton futures jumped 4% to $ 1.09 – the highest since September 2011, according to CNN Affairs.
At that time, last year, cotton was around 65 cents a pound, according to data from Nasdaq. The higher prices could drive up clothing costs – which were already on the rise after a combination of the pandemic and extreme weather conditions – and trickle down to consumers.
The cost of t-shirts and jeans could become more expensive as cotton prices hit a 10-year high as extreme weather wiped out the United States’ cotton crops.
Around the same time last year, cotton was around 65 cents a pound, according to Nasdaq data (pictured). It is currently $ 1.09 a pound.
Clothing prices rose 4.2% in the 12 months, which ended in August.
According to the government’s inflation report, the price increases were largest for men’s shirts and sweaters, which rose 4.4 percent; men’s pants and shorts, which increased 6.6%; and women’s dresses, which increased 11.9%.
The price of the product has skyrocketed mainly because droughts and heat waves wiped out cotton crops across America – the world’s largest cotton exporter, according to CNN Business.
Peter Egli, the director of Plexus Cotton Ltd. Chicago-based called the situation a “classic short squeeze”, according to Bloomberg, while Robert Yawger, director of energy features at Mizuho Securities, attributed the price spikes to “a shortage situation.”
“The planting season has not gone well,” Yawger said.
The weather last year didn’t help. In October 2020, Hurricane Zeta, classified as a Category 2 storm, passed through Alabama and left the cotton fields in ruins.
According to the US Department of Agriculture’s Progress and Crop Report, about 60 percent of cotton crops have been pulled from the fields.
Clothing prices rose 4.2% in the 12 months, which ended in August
According to the government’s inflation report, price increases were largest for men’s shirts and sweaters, which rose 4.4 percent; men’s pants and shorts, up 6.6%; and women’s dresses, which increased by 11.9 percent
“For those who still have a recoverable harvest, the quality and yield will be much lower than expected before Zeta. It’s devastating, especially for our farmers in the black belt and coastal Alabama counties, ”said Carla Hornady, Alabama Farmers Federation Cotton; Soy; and director of the wheat and fodder cereals divisions.
According to WSFA, Monroe County Farmers’ Federation president Joe Jordan had planned to start picking his 494 acres of cotton in the first week of November, just days before the storm hit.
Jordan said of what Zeta left behind: “If you passed the field the day before, he was just completely white with cotton. When we drove by on Thursday morning all you could see were brown stems.
“All the cotton has been spilled. It’s pretty hard.
A month earlier, in September 2020, Florida farmers in Okaloosa County suffered a severe and costly blow to the year’s cotton crop after the high-speed winds from Hurricane Sally and over 20 inches rain.
Robert Yawger (photo), director of energy features at Mizuho Securities, attributed the price spike to “a scarcity situation”. “The planting season has not gone well,” he added.
Storm damage was around $ 1 million, as reported by NWF Daily News, and also took away the nutrients that farmers depend on for their crops to grow and thrive.
Farmer Nick Marshall, who runs his farm with his father, told the news station that “of all the cotton that was open, a good 50 percent is on the ground.”
China has also called for strong demand for cotton, which CNN Business attributed to the US trade policy implemented by the Trump administration in December 2020.
Last year, the Trump administration blocked U.S. companies from importing cotton and cotton products from China’s western Xinjiang region due to forced labor in the foreign country.
The policy’s sanctions remained in place after Biden took office, and CNN Business analysts reported that as a result, some Chinese companies began purchasing cotton grown in the United States.
These companies will then make products with that cotton and resell the products in the United States and other markets around the world.