“In the last six months cotton values have more than doubled with the price of cotton breaking through $2 a pound for the first time on March 3. Ouch!

“Cotton mills looking to guarantee future supplies pushed up US cotton prices to $2.0402 per pound on the ICE market exchange. Just six months ago a pound of cotton was changing hands on the same exchange for 75 cents (The Guardian; 17.02.11). 

“Values have surged due to a combination of increased demand from China, poor global weather conditions, such as the flooding in Pakistan, and speculative buying on international commodity exchanges. 

“Cotton follows amongst other things, oil and copper; all products subject to huge price rises which has sent alarm bells ringing throughout global governments due to the threat they pose to fueling inflation.  

“Retailers are already warning that customers should prepare for price rises of more than 10% in the autumn, despite acute awareness that people are also being hit by rises in petrol, heating and food prices. 

“This not only affects consumers but hits businesses hard in the pocket too. Discretionary spending, be it consumer or business, is exactly that, none essential buying behaviour. And we all know how promotional merchandise is regularly lumped into this category, rather than being seen for what it is; a value for money, high return advertising and marketing tool. 

“We have to keep pace with this inflation and work together to demonstrate that relatively small spending has been proven to work harder and be more cost effective than larger spends on TV, radio and print advertising (The Advertising Speciality Institute; 2010).  We have to get our customers to see this makes more sense! 

“At Crazy:Bags we have reacted early, substantially increasing our stocks of cotton products to over half a million in stock, in an effort to steady the price for our customers, whilst maintaining high stock levels for that special promotion. 

“But it’s not all bad news! The surge in cotton prices is expected to entice more farmers into devoting acreage to cotton plantations. The National Cotton Council estimates an increase of 14% in all-cotton plantings in 2011, to 12.5 million acres. As a result, cotton prices may ease later in the year as the harvest comes through, however, speculative bidders may drive the price of cotton even higher in the short term.”

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