The Business of Fashion: Clothing Prices on the Rise

5 03 2011

http://www.nbcnewyork.com/blogs/threadny/THREAD-Clothing-Prices-To-Rise-Up-to-20-By-Fall-117178343.html

The price of cotton has more than doubled in cost over the last year, and as a result many fashion retailers are forced to charge customers a higher price for clothing. This rise in the cost of cotton is caused by both a decrease in supply and an increase in demand. The supply of cotton has decreased as a result of the cost of factors of production, because the costs of manufacturing and labour in countries such as China and India are increasing. Also, the number of sellers has decreased because floods in Pakistan and heavy rains in China slowed production, and so fewer cotton farmers were able to cultivate the land and sell their cotton. The cotton market is experiencing an increase in demand from developing countries, and this is likely because of the increasing number of buyers, though the reason is unclear in the article. The result of a decrease in supply of and an increase in demand for cotton has caused an increase in its equilibrium price; however the quantity of cotton exchanged between sellers and buyers is unclear in the article.

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