Jeans Could Get Pricey After Cotton Prices Reach A Decade High

With global factors coming together to drive up cotton prices, the cost of making clothing will rise, leading to inflated retail prices for consumers.

Cotton futures raced past $1 a pound for the first time in nearly a decade as adverse weather and shipping snags threaten supplies, driving up costs for clothing around the world. 

Crops in several key-growing countries are seeing problems, from rain-drenched fields in the U.S. to bollworm-infested ones in India. At the same time, cotton buyers need more of the fiber. Mexico and China are buying record amounts. Also causing trouble for supplies are high freight rates and geopolitics, with international backlash about labor violations in Xinjiang, China's biggest producing region. The U.S. banned imports earlier this year. 

All of this is coming together to drive up prices, which means the cost of making clothing will be on the rise. That will squeeze margins for apparel makers like Levi Strauss & Co., and result in inflation for everything from T-shirts to jeans if retailers try to pass on the expense to consumers.  

In New York, the contract for December delivery climbed as much as 3.6% to $1.0155 a pound, the highest since November 2011. The price has surged 28% this year. Gains are being intensified by traders rushing to cover short positions.