(...) From 1970 to 2011 cotton futures prices averaged $62.52. As of February 2011 the futures price stood at a record high of $167.86, increasing 143% in the past 12 months alone. Much of this can be attributed to speculation. It is certainly true that during the past year virtually all agricultural commodities have increased dramatically - soybeans (+57%), wheat (+56%), corn (+74%). However, speculators notwithstanding, the big push has been due to the entry of new consumers in the market place. (...)
The cost of labour has gone up as increasing demand has created labour shortages throughout the garment exporting world. We used to assume that China and India, each with their teeming billions, would be an inexhaustible source of cheap labour. But circumstances have forced us to realign last year's assumptions with this year's reality. Labour is becoming scarce. Wages are rising and will continue to rise. Furthermore, we can no longer rely on local governments to keep wages down. Government leaders have finally been forced to conclude that they cannot retain power unless their citizens see benefits from that power. The global garment industry, which has traditionally paid the lowest wages, will face the highest wage increases. (...) The era of ever cheaper garments is over. In a world where prices for virtually all products invariably rise every year, the average FOB price for imported garments has fallen every year since 1997. In 13 years, prices have fallen 24%. In part this was due to higher productivity. However, as time progressed further reductions were achieved, first by squeezing the factory, then by squeezing the product - long sleeves, became short sleeves which became no sleeves. In 2010, we finally reached bottom, at which point there was no place to go, but up. (...) (...) From July 2005 to July 2008 China revalued the yuan by a whopping 21%. During the same period, the average price of a made-in-China garment increased by 17%. However, once the yuan ceased moving up in value, rather than remaining stable the average price of a made-in-China garment fell by 13% - with the result that between July 2005 and November 2010, the average price of a made-in-China garment rose a feeble 2%. There is no doubt that costs are rising. I am quite sure that China will revalue its currency by a substantial number, perhaps 20%. http://www.just-style.com/comment/why-who-how-much_id110622.aspx _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
