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Current Price Volatility

Feb 2, 2010

Dear Valued Customer; 

If you haven't already heard, there are some pretty hefty price increases expected for basic fabrics.  Recent world events have caused the price of cotton to rise 100% in the last year and prices are continuing to climb.  What this means to you:

1) Price instability.  Manufacturers, like Wazoodle, are allocated materials based on availability.  At the present time we can only lock in cotton prices for 30 days, so our material costs will rise and fall with the cost of cotton.

2) Some products may have supply interruptions. 

Look around and you'll find staple items like Organic Cotton French terry and fleece priced as high as $18/yard, others have reduced volume discounts which effectively raises their base prices.  Wazoodle has always positioned ourselves as a supplier with fair prices, so we held prices until Jan 2011.

For those who just want facts, here's what we're expecting for Feb-Mar 2011:

  • Cotton fleece, French terry, velour, knit terry and Sherpa will rise be $9.90/yard. 
  • Cotton jersey, Interlock and rib will rise by approximately $1.00/yd
  • Bamboo/Cotton fleece, French terry, and knit terry will rise by 15% or approximately $1.00/yard
  • Bamboo/Cotton jersey, Interlock and rib will rise by approximately $0.80/yd
  • PUL Prices will rise 20% or about $1.75/yard
  • Microfiber fleece and MicroFiber terry will rise 10% or approximately $1.00/yd

If you are interested in why, read on.

In the last year there have been several things that impacted the production of cotton around the world, all leading up to create the 'perfect Storm' that has caused prices to surge of late:

  • rain damages to cotton crops in China and Pakistan
  • lower production in the USA as farmers switched a portion of their cotton production to more lucrative crops
  • increase worldwide demand for natural fiber products
  • increase demand for cotton in blended fabrics i.e. bamboo/cotton, cotton/hemp, wool/cotton
  • farmers reducing market supply by holding raw inventory as they wait for prices to peak

Experts that look at the cotton market do not see relief in the near future.  As demand for cotton rises, additional production will kick in and eventually the prices will stabilize.  It's unknown as to whether stability will be at $1/pound or $1.50/pound, all we know is the cost for raw cotton will be substantially higher than it has been for the last decade.

If the outlook improves, we may not need to raise prices.  We will keep you informed.

Mike Morris
 

 
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