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US apparel prices steady despite drop in fiber prices

US retail apparel prices are expected to show little change in the coming months, despite an anticipated 10 to 15 per cent drop in the price of cotton by the end of the year. Fiber prices are expected to decline because of an anticipated cutback in US exports to China and because US farmers will be planting more cotton this spring.

But the cotton price decline is not likely to result in an equivalent drop in the price of apparel because other factors, from design to transportation, contribute to the price of the finished product. Fiber prices are just a fraction of apparel prices. The US has yet to see any decline in apparel prices even though both fiber and import prices are lower. So apparel prices will not be significantly affected by the behavior of fiber prices.

For the US China's management of its giant cotton stocks will be the major determinant of cotton prices for the year. China has planned to end its accumulation of cotton stocks and is expected to cut its cotton imports to 6.4 million bales this year down sharply from 11 million bales in 2013.



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