Is Cotton The New Gold?
Remember that bag of clothing sitting in the bottom of your closet, collecting dust, waiting to be dumped off at a Goodwill or a Salvation Army? Well, you might want to sift through all those shirts and pants from the 90s and hold on to them for a little while longer. Now, I’m not referring to that nylon tracksuit or those sweatpants with the pizza grease stains (let those go, please), but amidst a very poor crop season in overseas production markets, cotton is the new gold—minus the Jesus piece medallion (shout out to Biggie).
America’s favorite old crop, minus the whole enslavement of an entire race of people, is now one of the world’s most sought after commodities. Although consumer demand has been low since the recession, that same demand has risen dramatically during this economic recovery. This would seem like a great thing for consumers and manufacturers alike, but due to extremely erratic weather in China and India, as well as the devastating July floods in Pakistan, three of the world’s largest cotton producers saw a significant depletion of this years crops—a gap in supply that will likely take up to two years to close, according to Sharon Johnson, senior cotton analyst with the First Capitol Group.
So what does this mean for you? If you thought that companies would take the financial hit without passing off the loss in profit to you, the consumer, you would be alarmingly naive (I have a bridge in Brooklyn to sell you, as well). The fact is, major manufacturers, buyers, and producers of cotton are already looking for ways to make up for what is a textbook case of a supply-and-demand problem. Lululemon Athletics, a sportswear company, and other apparel companies have begun switching production to places with lower labor cost wages than China. Yes, you heard correctly, there are companies that believe China’s labor costs are too high. Other cost-cutting measures include reducing the quality of zippers and buttons, changing the overall material mix so it’s not so cotton-base heavy and using cheaper thread.
My advice? Whether it’s Rocawear, Levi’s, Gucci, or thrift-store bargains, invest in some quality jeans and outerwear now, because after the upcoming holiday season, when companies are financially compelled to sell items at low prices, the cost of cotton-based products will sky rocket astronomically over the next two years. Just stay away from double dipping on denim. Matching your jean pants with your jean jacket is no bueno, no matter how much you paid for the set—this isn’t ‘98 and you aren’t DMX. Happy shopping.