Global increase in cotton prices

For the last months, we have been experiencing a heavy rise in cotton prices, which have already hit a 140-year high.

The main reasons for this global shortfall that has pushed the prices up so much are a string of bad harvests and the high demand for this commodity from fast developing countries like China and India.

This sudden and unexpected rise in prices has alarmed many retailers and manufacturers in the apparel industry who are worrying about being forced to push prices up in times of weary consumers due to higher production costs.

Another concern that is talked about due to this rise in cotton prices is the dollar. The “paper” bills are actually made up to 75% of cotton (and 25% linen). Money printers all over the world are therefore facing higher production costs as the cotton prices have been rising for the last year. In 2010, the production costs of the dollar bills leaped to 50% from 2008 (currently at 9.6 cents)

This even comes to the point where there is talk about producing $1 dollar coins, which would be more durable and do not need to be replaced as often.