What is in this article?:
- Cotton prices rebound and a questionable article on synthetic fibers
- One designer is not a good sample size
- With cotton contract basis being very favorable, the move to near 80 cents in the cotton market the week of May 10 may coax producers into bale contracts on a portion of expected 2014 production.
- The article begins with the statement “Cotton is no longer king in the U.S. apparel industry.”
One designer is not a good sample size
An interesting article by Reuters came through my email last week.
The article begins with the statement “Cotton is no longer king in the U.S. apparel industry.” The article goes on to discuss the use of synthetic fibers, the change in synthetic fibers since the old polyester days, and the proposed change in consumer preference or lack of preference by some consumers between cotton and synthetics.
Quoting from the article—“US buyers imported 12.29 billion square-meter equivalents worth of cotton apparel last year compared to 12.04 billion of apparel made from man-made fibers. The trend is clear; synthetic imports have risen more that 20 percent over the past three years; cotton imports have fallen by 14 percent”.
A couple of observations from me:
- The article is discussing the apparel industry and uses of cotton. There are many other uses of cotton that are important to the overall demand equation.
- But, clearly the trend in the apparel industry is concerning. I have advocated all along that regardless of cotton’s price position relative to synthetics, the best thing cotton had going for it was that consumers prefer to wear cotton. As long as this is the case, cotton will be fine. If that preference begins to erode (and that’s what the article is suggesting), then cotton demand/use may decline.
- The article quotes a fashion designer whose clothes sell at Neiman Marcus and Saks Fifth Avenue as saying that “fashion-savvy” consumers are comfortable wearing polyester. I’m not sure this sample size represents the US general populace.
The purpose of this discussion is to note that the demand side of the equation is too often overlooked. We have a large buildup of World stocks and China has been able to build stocks because cotton production has outpaced cotton usage for 4 consecutive years dating back to 2010-11.
Demand is starting to improve as the price of cotton has moderated. But there’s only so much “moderating” in price that we can stand from a producer standpoint.