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As cotton costs skyrocket, shoppers feel pinch of higher clothing prices

With the cost of cotton sky high, Katrina Moon, of Longwood, Fla., said she has already noticed a difference on clothing price tags.

"Dresses and things have gone up in price. Even things like cotton underwear," said Moon, a trade-show model.

The price of cotton has more than doubled in the past year because of bad weather and increasing demand, and consumers and retailers are feeling the pinch.

For Moon, it means T-shirts for her 7-year-old daughter now cost $10, when she is used to paying about $6. If prices go much higher, she said she would probably go to consignment shops.

At Big Frog in Winter Park, Fla., franchise owner Nancy Salcido said she might raise the price of T-shirts she prints for sports teams, special events and individuals.

"What I paid for a blank, white cotton T-shirt a year and nine months ago, and what I pay now, is close to 100 percent markup," said Salcido, who sells shirts for between $5 and $15.99, depending on quantity. "It's ridiculous."

Other stores also fear alienating consumers, who reined in spending during the recession and are now grappling with higher costs for food and gasoline.

"That can get a little dangerous if you start creeping them up a little bit," said Gary Straub, managing director of the Sadler's men's clothier in Orlando. "You don't want to seem greedy."

His store's costs for cotton shirts have gone up about 10 percent to 12 percent over the past year. So far, he said, Sadler's has not changed its retail prices.

Many national companies, however, have already decided to start charging more.

The price of jeans already has increased by an average of 10 percent over the past six months, said Jeremy Rubman, a partner with consulting firm Kurt Salmon Associates.

Companies that have already acknowledged charging more include VF Corp., whose brands include jeans such as Wrangler, Lee and Children's Place. The children's chain has often advertised tops starting at $5. This week, tops started at $6 online.

Manufacturers also are making clothes with fewer frills by "taking off pieces of trim, going to smaller buttons or buttons that don't have logos on them anymore," Rubman said.

Much of the pressure has come from a cotton shortage that has been caused by several factors. China, the world's largest cotton producer, had cold, wet weather that contributed to a poor crop. Flooding in Pakistan hurt that country's production, and India put strict limits on its exports.

But even before nature took its toll, farmers had been producing less, said Jon Devine, an economist with trade group Cotton Inc. When cotton sold for lower prices, many switched to more lucrative crops. The rising demand for ethanol persuaded many farmers to switch to corn, and others went into soybeans.

Cotton was selling for less than 80 cents per pound a year ago. It peaked at more than $2.10 a pound in March and has now dropped below $1.70.

At the same time, demand has soared because of the improving world economy.

"We really could be looking at a generation of apparel inflation," Rubman said. "The domestic markets in our key producing nations are picking up significantly. They're driving more demand, which means costs are going to increase."

But Aleisha Iamaio, of Casselberry, Fla., already thinks prices are high enough.

A stay-at-home mom of two young boys, Iamaio tries to shop sales and consignment shops but sometimes likes to splurge for special occasions. Buying three shirts and a pair of shorts at Gymboree for her son Eli's third birthday set her back $55 recently.

She likely will make fewer similar purchases if costs go higher.

"The prices are ridiculous to begin with," she said.

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