Jeans Are Likely To Go Up This Year.

Affected by strong demand in emerging markets and tight inventory in the US, cotton prices could rise by more than 10% in recent years to a new high of 15 years, including apparel manufacturers, such as Levi Strauss &Co. and Hanesbrands, and so on.

The US Department of agriculture (USDA) data show that US cotton exports are hitting the fastest pace since 1993, mainly due to the strong demand for clothing, underwear, bedsheets and other fabrics in emerging markets such as China and Pakistan, and the increase in cotton imports.

On the other hand, due to poor weather conditions leading to poor cotton harvest in China and Pakistan's two largest producing countries, the market will be in short supply for fifth consecutive years, making the already low grade global cotton inventory go further down.

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Analysts pointed out that strong demand coupled with tight supply will stimulate cotton prices to continue to rise.

Bloomberg's average forecast for 17 analysts is that cotton prices could rise by 13% to 15 cents per pound 94.9 cents before the end of the harvest in October.

Lawson, director of commodity consultancy Logic Advisors, said: "global cotton consumption is booming, but supply is scarce, and it is unable to meet the needs of the market."

The US Intercontinental Exchange (ICE) cotton futures rose to a maximum of 85.79 cents per pound on the 16 day of December, up 31% over the past year, while the S & P 500 index rose by only 6.6% during the same period.

The rising cotton prices are good news for cotton investors, but the apparel industry is troubled by the increase in costs.

When cotton prices soared at 90 cents a pound in 2008, global cotton traders lost a lot of money, and Swiss Paul Reinhart was forced to declare bankruptcy.

Arvind, the world's largest tannin producer, estimates that revenues will surge by 23% to 40 billion rupees ($855 million) by the end of next March.

Arvind is the main supplier of the apparel industry in the United States. Its customers include Levis jeans manufacturer and Lee jeans manufacturer VF.

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According to USDA, cotton demand in the world is likely to grow between 2.7% and 120 million packages this year (1 packets equivalent to 480 pounds or 218 kilograms), mainly thanks to the 14% increase in China's imports and 53% of Pakistan's demand.

In the year of sale in July 31st, US cotton inventories dropped to 3 million 100 thousand bales, the lowest in 1996, and the US Intercontinental Exchange (ICE) cotton inventory has dropped by 98% to 25 thousand and 500 packages at the end of May.

Since the beginning of the new year, cotton exports to the United States have reached 5 million 410 thousand export packages (1 export packages equivalent to 500 pounds or 227 kilograms), the number is more than doubled compared with the same period last year, the highest since 1993.

However, this period of cotton production will help to suppress the rise in cotton prices.

Weitzman, executive director of VF, said that cotton production is expected to be a good harvest in 8 and September. "Next year, we can breathe a little bit."

USDA estimates that global cotton production will increase by 14% to 116 million packages this year, a record of three years.