â€œItâ€™s a little terrifying to deal with cotton suppliers now,â€ said Vicky Wu, a sales manager at Suzhou Unitedtex Enterprise Ltd., a closely held, Jiangsu province-based clothes maker that counts Gap and J.C. Penney among its clients.
Cotton futures in China have surged more than 70 percent this year and were at a record earlier as the global economy emerged from recession, allowing people to spend more on clothes. Production of the fiber in China, the worldâ€™s biggest user and importer, is forecast to lag behind demand for a 12th year, cutting its stockpile to the smallest since 1995, according to the U.S. Department of Agriculture.
â€œAmerican consumers better get used to rising prices on the shelves of Wal-Mart and other retailers,â€ said Jessica Lo, Shanghai-based managing director at China Market Research Group. â€œChinaâ€™s manufacturers are getting squeezed not only by rising cotton costs but also soaring real estate and labor costs.â€
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