The Cost of Cotton

The cost of fabric has always been higher here in Canada and the reasons have been many with the most important being import duties, the exchange rate and the fact Canadian shops have had to purchase their fabrics through fabric distributors. I explained this situation in a November, 2009 blog post - was it that long ago...yikes!

That November, I paid a visit to my fabric distributor in Vancouver, BC not knowing it would turn out to be my last. The company owner was quite excited because the Canadian government was contemplating removing duties on fabric coming over the border from the States which is the source for the majority of our quilting and sewing fabric.


Just over a month ago, I sent off an email to that distributor to ask if the duties had been removed and, if so, what was the wholesale cost of fabric now. Well, the duties did get removed in March, 2010 but guess what! - the wholesale cost was unchanged and the reason: unprecedented increases in the prices of cotton. Raw cotton on the world market is the highest it has been in a century and it is due to those two basic tenets of economics: supply and demand.

The supply of cotton decreased because China (a large producer) saw its crops wiped out due to bad weather and in America (another large producer) farmers moved away from cotton and into more lucrative crops like soybeans, corn and wheat. However, the demand has continued to rise mostly due to expanded manufacturing in China.

Out of curiosity, I did some searching on the internet yesterday to see if there were any new articles on cotton prices and according to The Globe and Mail and Wall Street Journal cotton prices have begun to fall and should drop substantially by 2012 because of rising production. If farmers are going to make more money growing cotton, that's where they will head. The downside to this may be less soybeans, corn and wheat (so says the G&M). So, guess what? Cotton may be cheaper but food prices will continue to rise! Here is a WSJ article prediction. Have you noticed that corn (in the form of starch) is in everything? I was reading the product label on sour creams in the grocery store and most had corn starch in them - particularly the cheaper brands. Corn starch is a thickener so they are watering down the yogurt and then re-thickening it with corn startch! We are walking corn chips!

I digress...LOL. Will we see quilting fabric prices fall? I doubt it very much. We have to remember that though the United States is a large producer of cotton that cotton is shipped to mills in Asia to be turned into fabric. It is then imported back into the States for distribution at home and abroad (to Canada and Europe) and the value of currencies will have a big impact on prices.The purchasing power of the American dollar has continued to fall since the recession began and this is likely to continue - while this is good for American manufacturing exporting abroad it has the opposite effect on imported manufactured goods (like fabric!).