Cotton Prices Affect Wholesale T-Shirt Market
Many of you know that cotton prices have had a major affect on the wholesale t-shirt market the past few years. Most of the world’s cotton is grown in China and Pakistan and both of these countries have been hard hit by severe weather conditions which negatively impacted the cotton crop. So what does this mean to you? Well…it’s simply a matter of supply and demand. If there is less cotton crop, the supply is limited which drives the price up. So the same t-shirt you were purchasing 3 years ago may be 20% higher priced now.
T-Shirt factories like Hanes and Gildan have to pay more for their raw materials and must pass on this added expense to their customers. The good news is the worst is behind us we think. Cotton prices have come back down but major t-shirt mills are still working through older inventory so we haven’t’ seen prices come back down to levels they were a few years ago. This cotton price issue not only affects the t-shirt market but also sweatshirts, polar fleece, polos, and many other items not related to our business directly. Is there a way to avoid this issue happening again in the future? Not really. Mother is nature is going to do what she is going to do and that is the bottom line. Yes, when cotton price are low, factories can stock pile inventory, but that may not be the best way to go about things. Many factories have started buying their cotton 12-24 months in advance when they used to only purchase 9 months in advance. We shall see if this is the best strategy for them. Not to plug our own business, but buying from us is even more valuable during these times because our t-shirt prices are lower than anywhere. Just saying!