In “Amber Waves to Ivory Bolls“, the NY Times describes the general rush of farmers to plant fields of cotton in the U.S., Brazil, and other countries to take advantage of the high prices of cotton despite the high prices of other food crops. This wave could place further upward pressure on the prices of food as clothing makers win the battle for acreage.
The NYT includes a particularly poignant quote from Webb Wallace, executive director of the Cotton and Grain Producers of the Lower Rio Grande Valley:
“It’s good for the farmer, but from a humanitarian perspective it’s kind of scary…Those people in poor countries that have a hard time affording food, they’re going to be even less able to afford it now.”
It could be another year of discontent for those people whose budgets are largely consumed by the costs of food.
In “As Cotton Prices Rise, So May the Cost of Hotel Rooms“, CNBC cites the soaring costs of linens and towels as a potential contributor to higher hotel prices. I was most fascinated with the incredible price hikes since last summer.
Prices are from 2010 to 2011 as paid by hotels.
- Queen-sized sheets: $72/dozen to $116/dozen (+61%)
- Pillows: $8.80 to $9.56 (+9%)
- Bath towels: $41/dozen to $64/dozen (+56%)
Cotton prices have been the main driver for skyrocketing costs.
In “Unable to Stretch Further, Apparel Makers Raise Prices“, the WSJ notes that surging prices for cotton will force apparel companies to hike clothes prices next year even if consumer demand remains sluggish:
“Hanesbrands Inc, Jones Group Inc. and VF Corp. said they will raise prices for clothing set to hit stores early next year by as much as 10%. When cotton prices began their climb a year ago, retailers and manufacturers were unclear how much—if any—of the cost would be passed along to consumers. But with benchmark cotton now up about 80% since the beginning of the year, apparel companies say they no longer have a choice.”
…and polyester will not provide any pricing relief:
“Companies can’t blend their way out of the problem. Polyester prices are also rising, climbing between 20% and 25% this year driven by oil prices and higher demand from manufacturers switching away from cotton.”