The world's textile producers have seen a steady increase in fiber prices during 2006, primarily because of increased energy costs, a trend that is likely to continue in the new year.
Wool has experienced some of the biggest price gains among natural and synthetic fibers. The average price of a pound of wool reached $3 last week, after ending 2005 at $2.13 a pound, according to the Woolmark Co.
Stuart McCullough, a product commercialization manager with Australian Wool Innovation, attributed the rise to a combination of a prolonged Australian drought and an increase in demand.
"There's a drought down there that they're saying is the worst on record," said McCullough, who is based in New York. "It's very bad and given that our seasons are the opposite of here, they had a winter with very little rain and they've now gone into summer when it doesn't rain."
McCullough returned from a trip to Australia last week and said the situation was the worst he had seen. Typically, Australian sheep farmers don't need to purchase supplemental food for the animals until February or March. However, farmers have already found it necessary to begin buying feed.
"If they can't feed or water the sheep, they can either sell the sheep for meat or they have to shoot them," McCullough said.
The demand for wool has increased among retailers and consumers. Retailers have gravitated to wool as a way to better their margins, while consumers have been drawn to less disposable and higher-quality products, McCullough said. The rising popularity of cashmere in recent years has benefited wool, as well, he added, pointing out that the fibers are similar.
"We're seeing pressures from both the supply and demand side," McCullough said. "You only need one to see price go up....There's no doubt the price will be higher in 2007."
Cotton prices have been fairly stable in the past year, dipping slightly to 51.99 cents a pound from 53.49 cents a year ago. Cotton Inc.'s December Economic Letter noted that the U.S. Department of Agriculture's monthly report points to looser markets for cotton domestically and worldwide. In the U.S., with 90 percent of the crop harvested, production estimates are unchanged from last month at 21.3 million bales.The USDA said demand forecasts waned from November, as both mill-use projections and export forecasts declined. Domestic mill consumption for this marketing year is projected to slide from to 5.1 million bales from 5.2 million, in line with year-to-date estimates of annualized cotton usage from the Census Bureau.
With no change in supply and demand lower than last month, ending stocks climbed 5 percent, or 300,000 bales, from last month to 6.3 million, pushing the stocks-to-use ratio to 29.9 percent from 28 percent — the highest level in five years — a pattern normally associated with weakness in prices.
World demand is expected to expand from last month to a record 121 million bales, mainly because of a 300,000-bale increase in use in India. September Indian cotton yarn output climbed 14.5 percent in the 12-month period, well above the 6.1 percent annual growth the USDA had forecast. With Indian investment in new spindles expanding by double digits from last year, Indian use may expand further in the months to come.
Worldwide, gains in supply are expected to outpace demand, which would likely lead to price weakness, Cotton Inc. said. An early look at 2007-08 points to increased plantings of alternate crops in the U.S. at the expense of cotton acreage, suggesting lower production next year. With forecasts for high petroleum prices to continue into 2007, polyester prices should remain at elevated levels, supporting continued growth in global cotton demand, the report said. It concluded that "while current fundamentals imply little short-term opportunity for sustained price gains, tighter supplies and higher demand next year portend a return to stronger prices in 2007."
There have been fluctuations in the synthetic fiber business, as well.
Greg Vas Nunes, Hyosung's president for Europe and the Americas, which manufacturers Creora spandex, said there had been a reversal in the global balance between supply and demand in the second half of 2006.
"A significant shortage of supply occurred due to asset shutdowns, raw material shortages and product mix [denier] shifts," Vas Nunes said. "Coincident with this shortage, fiber prices rose in the global market by over 10 percent from September onward."
Production capacity has been added for 2007 and the supply of raw materials has increased, leading Vas Nunes to believe that spandex fiber prices will "return to a more stable position through the year."David Stone, president and chief executive officer of Solid Stone Fabrics in Martinsville, Va., develops and sources fabrics globally and saw some price increases at the fiber level over the summer.
"The indications are that early in the spring there could be cost increases that are being driven primarily by petroleum," Stone said.
The larger impact comes from rising energy prices and a corresponding increase in transportation costs, said Stone. Still, factoring in rising fiber and energy prices, Stone predicts overall prices will increase between 2 percent and 6 percent.
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye