Rising Cotton Prices Affects Textile Rental and Linen Supply

Cotton, also referred to as “white gold”, is one of the ancient fibers under human cultivation, with evidences of cotton dating back more than 7,000 years. The plant is native to the tropical and subtropical regions across the world, including the Americas, Africa, India, and Pakistan. Cotton is used to make a number of textile products such as clothes, bed sheets, cotton napkins / table linens, medical uniforms, kitchen uniforms and many- many more.

India and China are the largest producers of Cotton in the world. China is the both the largest producer and importer. Recently, severe weather conditions and natural disasters in China have obstructed the growth of the plants. At the same time, an increase in global demand for cotton, particularly in China, made the crop’s price even higher. India, the second major producer, has prohibited cotton exports which has aggravated the global supply issues. Moreover, the untimely climatic conditions in the US have destroyed the cotton crops, driving up the raw material costs by more than 700 percent.

The increasing worldwide demand from spinning mills, and shrinking global stock piles have also contributed to the record high cotton prices. The consumption of cotton around the world is constantly exceeding the production; which ultimately leads to the supply shortage; which drives up the costs.

While domestic producers of cotton are relishing the additional benefit of a higher yield for their commodity, retailers, wholesalers and other buyers across the globe are feeling the plausible affects of rising raw material costs.

The cotton crisis has manifested itself in every sector from clothes and textiles to laundries, linen, and textile rental services. The textile rental companies who serve restaurants, medical, and other industries have perhaps been hit the hardest. Depending on the company and their plant’s products mix, these weekly linen and uniform services are meeting resistance from passing along the increase in material costs. The majority of the products associated with the increased costs include cotton napkins, bar towels, aprons and kitchen uniforms for restaurants; bed sheets, towels, gowns, and medical uniforms for medical facilities. Hotel providers have also been hit hard for their luxury bath towels and sheets used in the guest’s rooms. Cotton is unrivaled to any other artificial fiber these industries buy, making it impossible to find a suitable substitute.

Therefore; products made with cotton will always remain in high demand. The rising question is, “will linen and uniform supply companies be able to get the voluntary support from their customers to offset the additional costs?” If not, it will certainly reduce the bottom line of these companies. If the price increases are mandatory, “will that open the door for other companies in the marketplace?” The soaring cotton prices have left linen supply services with the classic pricing dilemmas: Do we cut margins to maintain current performance or raise prices and risk losing business?

These record high prices certainly help cotton live up to its long time nickname— WHITE GOLD.