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Cotton-Supply Shortfall, Rising Demand Send Prices Soaring

cotton-thread.jpg

Cotton thread.
(Photo: ©iStockphoto.com/Danish Khan)

Bruce Beggs |

CHICAGO — Soaring demand amid low supply levels has pushed cotton prices to record heights in recent months, and the costs of finished goods have risen in turn.
Textile manufacturers are working feverishly to maintain their raw-materials supplies while providing their customers with finished goods that won’t break their linen or uniform budgets.
On the laundry side, linen conservation has never been hotter. The manager who can extend linen life without sacrificing product quality will see his or her value rise, too.ALL-TIME HIGH
Some reports show that cotton prices went from 84 cents a pound in July 2010 to an all-time high exceeding $2 a pound last month.
Strong global demand coupled with poor crops due to flooding and heavy rains in China and Pakistan—two of the world’s largest cotton producers—is to blame for the historic run, according to Brian Bensman, senior director of global production and purchasing for Cintas Corp.
“Hoteliers can expect to see price increases for many items requiring textiles, such as employee apparel programs and guest linens,” Bensman says.TEXTILE MAKERS RIDE MARKET TIDE
Manufacturers are reassessing their market offerings and trying to help customers better utilize the textiles they buy.
“We buy domestic cotton futures and yarn for our U.S. plants, which is less expensive than overseas cotton and yarn,” says Norman Frankel, senior vice president of sales for Standard Textile Co., who adds that his company has raised its finished-goods prices by 15-35% depending on item.
Standard Textile Co. is proposing different blends, such as its high-polyester-content E-Star product line, and is ready to launch a new line of synthetic textiles, he says.
Encompass Group is looking at reengineering products, manufacturing in different countries, and even changing fabric blends by increasing polyester and decreasing cotton, says Joe Przepiorka, vice president of marketing.
Lenore Law, CEO of California Textiles, says her company stockpiled yarn to ensure it would have finished goods in the first quarter. She is encouraging her customers to look at 16-yarn product. “It has a much better hand, lasts longer, and did not increase in price as much, so it is a better deal compared to rough 10-yarn product.”
Superior Uniform Group President Alan Schwartz warned of the cotton shortage in a white paper published last October. “This is a problem that will remain with us and, if the world continues to recover at a faster pace than the USA, the situation may ... get much worse.”HOW ARE OPERATORS REACTING?
Laundry operators are looking to expand their supplier networks, seek alternative sources, change their ordering patterns and make operational changes in light of higher prices, according to results of the latest American Laundry News Wire survey.
Many are working with end-users or customers to prevent linen abuse and/or reduce linen utilization, and adjusting wash formulas, emphasizing better soil sorting and/or increasing linen-inventory security.
“We have had to put greater influence on stain load recovery (and) customer inventory levels, and push soil levels further ahead in production,” says Steve Havlik, CEO of Madison (Wis.) United Healthcare Linen.
“We are already involved in a serious effort to lower our linen utilization,” says Gary Kennedy, CHESP, CLLM, operations manager for EVS/laundry at Trinity Mother Frances Hospitals and Clinics, Tyler, Texas.
And don’t expect the emphasis on linen conservation to wane anytime soon, experts say.
“This is a long-term issue, and the return of the previous cotton prices will not occur,” says Standard Textile’s Frankel. “The market has to plan for the new normal of higher cotton pricing.”
Przepiorka is a bit more optimistic, but still admits there are no signs the market will normalize in 2011. “I think the industry as a whole is going to get smarter ... as a result of this process.”

About the author

Bruce Beggs

American Trade Magazines LLC

Editorial Director, American Trade Magazines LLC

Bruce Beggs is editorial director of American Trade Magazines LLC, including American Coin-Op, American Drycleaner and American Laundry News. He was the editor of American Laundry News from November 1999 to May 2011. Beggs has worked as a newspaper reporter/editor and magazine editor since graduating from Kansas State University in 1986 with a bachelor’s degree in journalism and mass communications. He and his wife, Sandy, have two children.

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