Cotton prices are on a tear – and the impact is beginning to be felt in garment industries around the world.
"It's really a no-choice situation," Wesley R. Card, the president and chief executive of the Jones Group – which makes Anne Klein, Nine West and other lines of clothing – told the New York Times. "Prices have to come up."
On the IntercontinentalExchange, No. 2 cotton futures for December 2010 delivery rose 0.185 percent to 134.51 cents per pound, after earlier jumping to an intraday high of 139 cents per pound.
"So far, [the rally] has shocked even the most veteran traders," Mike Stevens, an independent cotton analyst in Mandeville, Louisiana, told the Times in an e-mail. "It has resulted in panic buying by mills worldwide in order to ensure that they can keep their doors open."
The rally is the result of a conflux of soaring demand from manufacturers at a time when chilly weather is hurting crops in Chinese provinces. Pakistan is also experiencing a prolonged shortage of the fiber as a result of its recent devastating floods, and that nation's garment makers will have to import millions of bales to stay supplied.
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