T-Shirt And Jean Inflation Coming With Decade High Cotton Prices

Zero Hedge – by Tyler Durden

Cotton futures in New York are squeezing higher Tuesday morning, racing past $1 per pound for the first time in a decade as adverse weather conditions and robust demand tighten global supply.

In New York, the contract for December delivery climbed as high as $1.01 per pound, the highest since November 2011. In the last six sessions, prices have surged more than 14% on news of heavy rains damaged crops in Texas and Mississippi, the top growing regions in the U.S., according to Maxar Technologies Inc.’s senior meteorologist Donald Keeney who spoke with Bloomberg

Higher fiber prices could soon mean more expensive T-shirts to jeans and other apparel, which would be another headache for consumers already paying an arm and a leg for gas and food.

Some analysts believe the mechanics of the push higher in prices is because of an epic short squeeze.

“This is a classic short squeeze,” said Peter Egli, the Chicago-based director for Plexus Cotton Ltd. “The trade is short.”

O.A. Cleveland, a Mississippi State University economics professor, and consultant, believes more price gains are coming because of the “outstanding short positions in the market.”

Supply chain disruptions could make matters worse for the industry.  An economist for North Carolina-based researcher Cotton Inc., Jon Devine, said, “it is not easy to get cotton to mills in short order.”

Devine said China has been increasing U.S. supplies in recent weeks. The “raw-fiber equivalence of cotton estimated to be contained in U.S. apparel imports has been occurring at the highest rate since the 2010-11 price spike” when futures reached record highs, he said.

A significant problem developing is China’s move to acquire U.S. cotton comes when Beijing has shut down electricity-intensive factories such as apparel manufacturers to conserve power. All of this means consumers could see price increases in the clothing they purchase.


4 thoughts on “T-Shirt And Jean Inflation Coming With Decade High Cotton Prices

  1. What clothing could be more essential than jeans and t-shirts? This is going for the juggler. Or is it to push a glut in buying? Get you underwear now!!

    Inflation is the tyrant’s tool for tyrannizing.


  2. So what part of Texas had so much rain it damaged cotton crops? Now far west Texas did get more rain this summer than in the last three years, but still… I doubt if all that rain damaged all those crops along I-10 for about 200 miles and on I-20 into the Permian Basin area. So where in Texas did these crops get damaged?

  3. Truth be known China has been supplying most of the world’s cotton jeans & t-shirts for some time now. The biggest problem with that is that it is all from GE cotton plants & the health risks from wearing this sh*t against your skin have been known for ages & are not insignificant. This sounds like yet more moves in the direction of getting rid of all opposition to China’s market domination. Monopolies are the best way to continually ramp up prices.

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