Spike in cotton prices hurts quilters' wallets
By Matthew A. Ward
CARROLLTON, Va (Reuters) - Last year, customers at Bella Fabrics in eastern Virginia paid no more than $9.99 a yard for the designer fabric they fashion into quilts.
But these days quilters who shop at Lisa Steele's store and others around the country are finding that their hobby has become more expensive, thanks to a "perfect storm" of events in the global cotton industry that have pushed fabric prices up to anywhere from $10.50 to $12.99 per yard.
Retailers "knew it was coming," Steele said. "When we went to buy goods (at the spring market)...we were hit with tremendous prices."
The sticker shock is the result of a number of seemingly isolated global events that led to the most significant spike in cotton futures since the Civil War, according to John Robinson, a Texas A&M University agricultural economics professor who runs a website on cotton marketing.
Three to four million bales of cotton were lost in Pakistan's devastating floods that began in July 2010, he said. Then last August, Russia temporarily banned wheat exports due to drought, causing speculators to start buying not only wheat but also corn, soybeans and cotton.
A lackluster monsoon in India and a cold, wet cotton harvest in China also were contributing factors, he said.
"But the real kicker was that, some time in about October, the official analysts (the U.S. Department of Agriculture) concluded that because prices in China were rising so much, it must be -- they just made this big inference -- that they had less cotton on hand," he said.
Robinson said this "perfect storm" created "an honest-to-gosh panic on the part of commercial buyers -- textile mills, mainly -- and they bought up everything in sight at whatever price." Continued...