Price relief is expected over the next three years due to lower raw material costs and a strengthening dollar.
Los Angeles, CA (PRWEB) May 08, 2014
Buyers of finished broad-woven cotton fabrics have a buyer power score of 3.2 out of 5. In this market, buyer power is strengthened by the low concentration of suppliers, low switching costs and a favorable price forecast. The low market share concentration indicates that there are many suppliers from which a buyer can choose, whether their needs are highly specialized or very diverse. Buyers have the option to shop around to find the supplier that best suits their needs and offers the most value at a given price. The low switching costs are also beneficial; once a buyer has met their cotton fabric needs, they are free to source from another supplier. “As such, buyers can optimize the price they pay and service level they receive,” says IBISWorld business research analyst Nikoleta Panteva.
Over the three years to 2016, the price of finished broad-woven cotton fabrics is anticipated to decline, benefitting buyers seeking this product. The world price of cotton is projected to come down from its recent peak, offering some cost relief to suppliers and trickling down to buyers in the form of lower fabric prices. “Buyers are advised to wait to purchase their cotton fabrics (if possible) to achieve the best cost savings,” says Panteva.
Buyer power is mitigated, however, by very high and unpredictable price volatility, which stems from the volatile nature of cotton prices. Because cotton is subject to environmental factors, its supply and price can vary drastically year to year. This volatility creates uncertainty in the price of cotton fabrics and also increases supply chain risk and suppliers' financial risks. Buyers cannot accurately plan their budgets and the likelihood of a shortage, a price hike or supplier bankruptcies are moderately high.
Buyers are advised to seek out substitute fabrics when possible to mitigate these risks. However, a severe cotton price spike, like the one that occurred in 2010 and 2011, will cause the price of alternative synthetic fibers to jump as well, limiting the benefit to downstream buyers. Major vendors include Milliken & Company Inc., Parkdale Mills Inc., International Textile Group Inc. and Kassatex. For more information, visit IBISWorld’s Finished Broad-Woven Cotton Fabrics procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of finished broad-woven cotton fabrics. Suppliers provide a variety of primarily cotton-derived fabrics such as plain weave, twill weave, cotton oxford, knit cotton, cotton velvet, and cotton chenille fabrics. Broad-woven fabrics have a variety of uses, including clothing, furniture, automobiles and household goods. This report excludes wool and synthetic fabrics.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.