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03 The cotton farmer ***New***

The cotton farmer is used to a relatively lowly position in the fashion hierarchy, but he saw his stock soar in 2010, and, as a result, his profile as one of the most powerful characters in the industry also rocketed.

A ban on cotton exports from India at the start of the year, poor cotton harvests in China and flood-hit Pakistan put a severe squeeze on supply. This, coupled with a surge in demand for cotton, meant the fibre went from a staple product to being traded as a commodity by those looking to make a quick buck. Some industry sources claimed traders were multiplying their investments in cotton by 10 times in a single day and thus prices spiralled accordingly.

The price per pound reached new record highs on a near monthly basis and rose past the $1 (64p) per pound mark for the first time in 15 years. The cotton farmer had Arcadia owner Sir Philip Green, Marks & Spencer chief executive Marc Bolland and Next chief executive Lord Simon Wolfson seriously concerned over what to do about pricing. Next said it would pass the cotton price rises on to its customers and take a hit to its market share, while Primark said it would keep prices low and erode some of its already paper-thin margins.

Who has the best strategy is yet to become clear, but Drapers predicts the cotton farmer will command a position of power well into next year.


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