The price of one pound of cotton jumped to more than two dollars after the demand for clothing recovered after the global financial crisis, while India – one of the most important cotton exporting countries – stopped shipments in order to help its local partners, and it is worth noting that the last time cotton prices rose to these levels was in July 2011.
The price of the cotton shirt rose to an average of 1.5-2 dollars, as consumers sensed that rise, which reduced the profits of companies as well. However, analysts and experts expect that the current cotton price inflation will be less harmful to the industry, knowing that manufacturers and retailers have the ability to pricing. This will allow companies to avoid higher costs without hurting consumer demand.
On Friday, the price of cotton reached $1.16 per pound, touching its highest level since July 7, 2011. It rose by about 6% this week, to reach its rate of increase since the beginning of the year so far, about 47%.
The problem arises from several factors. Last December, the administration of former US President Donald Trump banned companies in the United States from importing cotton and other cotton products that originated in the Xinjiang region in western China, after concerns that those products were being manufactured through forced labor by the ethnic Uyghur group. Read more [The US Adds 14 New Chinese Companies To The Ban List].
Severe weather, including droughts and extreme heat, wiped out cotton crops across the United States, the world’s largest cotton exporter.