Pima Demand Soaring Overseas
Cotton prices have risen dramatically in recent months (see related story here), but Supima, the company founded to promote the use of American-grown Pima cotton, maintains the rising prices are the result of rapidly escalating demand.
According to Supima, export sales of Pima cotton are up 462 percent so far this year.
As of April 22, registered export sales of Pima cotton reached 658,800 bales. At this time last year, export sales were reported to be 142,700 bales. California produces 95 percent of Pima cotton grown in the United States. (Arizona, New Mexico and Texas produce the rest.) Pima cotton is a high-end, long-staple cotton originally made from a hybrid of American and Egyptian cotton plants.
“Eighteen months ago, when the global economy slowed in the fall of 2008, prices had been at levels where they are today,” said Marc Lewkowitz, executive vice president of Supima. “But at that point, brands and retailers cancelled open orders, did not submit replenishment orders and did not order any new programs. As a result, the production sat mainly unsold and prices began to tumble.”
In mid-2009, demand began to rebound—and prices along with it. “Mills have been rapidly buying up the cotton inventories to assure that they have inventory on hand to be able to produce the programs that are coming in,” Lewkowitz said. “At this point this year, all of the excess inventory from two years ago and the production from this last crop year have been virtually sold out to the spinning mills that now have the inventories to ensure that they have the supply to carry them through until the next crop harvest, which starts this November.”
Lewkowitz said despite the spike in demand, “there is plenty of [Pima] cotton in the supply chain to supply programs—about 700,000 bales’ worth.”
China is the largest consumer of Pima cotton. The country has, so far, purchased 315,900 bales. India is the second-largest buyer, with 123,600 bales, and Pakistan is the third, with 64.400 bales. Indonesia has purchased 22,200 bales, and Japan has purchased 20,800. These five countries represent 83 percent of the export sales of U.S. Pima cotton to date.
There are currently 400 spinners and apparel makers licensed to market Supima products, as well as numerous apparel manufacturers and retailers. Licensees pay a $5,000 annual fee, which allows them to use the Supima label on their products. (Brands and retailers are not required to pay the fee.)—Alison A. Nieder
