If you haven't noticed price increases everywhere around you, then you've probably been living under a rock—or playing your Xbox a bit too much. Just yesterday, the New York Times released an article regarding commodity cost jumps in nearly every industry. Companies, us included, have worked hard to absorb these increases without increasing retail costs during a recession, but the cost pressures are increasing. Large brand names such as Polo Ralph Lauren, Brooks Brothers, Hanes Brands and the Jones Group are all reluctantly raising prices this year due to unavoidable costs. As this effects a large part of what we do here at Minerva, I’ve been following this topic for a while now, reading several news articles and blogs.
Booming, Inc. claims, "Cotton has officially earned its nickname as North America's 'white gold'." This isn't surprising. Think about it. How many t-shirts do you own from various activities you've been involved in? It took me my entire college career to wear out my t-shirt collection from high school and four years later I’m still wearing my college tees to the gym. We sometimes go crazy over t-shirts, and they're only a fraction of our total cotton use.
Unfortunately, if you reflect over the past decade, cotton prices are nearly at their peak. While the original cause is likely related to severe weather conditions in both China and Pakistan, the world's two large cotton producing countries, other factors include increased demand and increased labor costs. The Wall Street Journal labels Chinese hoarders as one of the biggest concerns. Several Chinese farmers began to stockpile cotton on their homes, some as much as 7,700 pounds, hoping for an even larger return down the road. Terry Townsened, executive director of the International Cotton Advisory Committee, notes that it's difficult to even know exactly what the situation is as several large players in the cotton industry do not publish data on their stock which leads to an endless source of rumors and speculation.
On a more positive note, this fabric of our lives is anticipated by some to stabilize around September of this year. Either way, we want to let you know that we're doing all we can to give you the best competitive edge and keep your costs low. Bear with us!