Tales Of A Fourth Generation Textile Executive: Fabric Pricing In Relation To Cotton Prices

Finally March is here and go figure….another Sunday afternoon with snow.  It just never ends.  I am underwater with travelling and cold weather these days.  A cold couple days in Florida.  Last week I hit Massachusetts and New Hampshire…more warm places, NOT!  This week I am heading to the Carolinas and the week after that to Ohio.  I did want to make sure to write a blog for this week so I came up with a subject that I could cover in a short and sweet manner.

So the subject today is the price of cotton versus the cost of printed fabric.  As you may or may not know, cotton is a commodity that trades on commodities exchanges like oil, gas, gold, etc.  Like oil and many other commodities, cotton prices have gone down from their peak a couple of years ago when commodities all exploded in price. 

So the million dollar question today is, “why haven’t fabric prices gone down with the price of cotton?”  For starters, I like the way my dad puts it when he says that we are not selling cotton….and that is the truth.  There are many other factors that go into the actual pricing of the fabrics that we are printing and purchasing from overseas mills.  The biggest contributors to the fabric prices not going down are two-fold according to the people that I have spoken with.  Number one, the dyestuff (the color used to print on fabric) has been skyrocketing in price.  Number two, the cost of labor is going up as well.  So these two factors are outweighing the decreases in the fabric cost.  Moreover, those 2 factors have a larger weighting in calculating prices.  I keep asking my suppliers for better pricing, but that day hasn’t come yet. 

This is the long and the short of it.  So next time someone asks you why fabric prices haven’t come down with the price of cotton, you have the answer.

Let me know what you think. 

Have a great week and stay warm.  Hopefully the warm weather will come soon.

Regards,

Professor Scott