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The Classic White T-Shirt
...a lesson in fashion’s global reach
To unpack these broad statements, I present the news that UK retailers predict that clothing prices will continue to rise into 2011. This relates directly to the price of cotton, which makes up roughly 20% of the fashion industry’s natural materials but to uproot the cause we must examine the clothing manufacturing process at its very first tentative steps as the soft fibres, which frost the cotton plantations of Asia. When the Bangladesh and North Eastern China floods devastated the cotton crop in 2010, the deluge destroyed more than the 4.25 million acres of arable land and 25% of the annual global supply. With it, the water washed away the promise of a stable cotton price from the world’s largest exporters. The cost for the wholesale fashion industry’s raw materials rose by a staggering 700% in a matter of weeks, the highest in 15 years as demand outstripped a suddenly limited supply.
Capitalising on the potential long term vulnerability of the world’s cotton supply, hedge fund managers rushed to invest in futures, that is the forecasted crop growth for next year and high investment returns from such a commodity. Recognising the strategic importance of this natural resource, the world’s biggest cotton producers including China, India and Pakistan placed controls on the level of exports thereby reducing supplies further.
Compound this, if you will, with the sharp increase in oil price within the same year and the costs of transporting your soft cotton t-shirt to its neatly folded position on the department store counter rises uncomfortably. With the persistent uprisings in oil-producing Egypt and Libya, a sustained cost per barrel became a distant reality peaking at over $100 in early 2011. Once more the cranking kerching of the cash register sounded as fashion’s costs of production were manipulated and stretched. The simple white t-shirt now represents a substratum of negotiations and flows of money on a global scale fraught with the potential pitfalls of a fashion industry reliant on natural resources. While the ebbs and flows of inputs into the fashion industry are vast the great fashion beast is sluggish. The sheer scale of the production chains allowed inflated costs of production to only begin impacting price tags at the beginning of 2011.
Perversely, the impacts of these rising costs may have little or no impact on prices for some of the UK’s largest retailers. Indeed, retail heavyweights Hennes and Mauritz AB (H&M), Inditex (Zara, Massimo Dutti) and Associated British Foods (Primark) have safeguarded the lion’s share of the market by reducing profit margins rather than increase prices. The retail sector begins to resemble a game of poker in which the richest players have the strongest cards and retain the most potent opportunities to profit. Most telling, however, is that the nation’s two largest high street retailers, Marks and Spencer Group PLC and Next PLC have raised clothing prices by 5-8% in keeping with the rise in production costs, a trend which is predicted to continue through to their Autumn/Winter 2011 collections. The good news among this is that consumers may look forward to stable prices from the beginning of 2012 as the issues begin to filter through the system.
It is undeniable that the future of cotton production is and will continue to be contested. It signifies a rolling out of protectionist trade initiatives by exporters and predatory speculation from the world’s financial centres thereby bringing the fashion industry and the natural resources it relies on to the forefront of political agenda. While niche markets for ethically and sustainably sourced cotton farms exist beyond the manacles of global politics, the market is dominated by cheaper, vulnerable cotton production networks. The choice presented to consumers is a potential switch to cheaper man-made fibres or more drastically an out pricing of consumers once larger retailers can no longer afford to run on slashed profit margins. The sartorial decisions concerning the classic white t-shirt for now appear to remain in your hands but economically they have already been made for you.