Clothes prices to rise as Aussie wool prices soar
Suits, jumpers and socks are set to become more expensive after a surge in the price of wool driven by Australian floods and demand from emerging markets.
The cost of fine wool on the Sydney Futures Exchange has risen 74% to £9,400 a tonne in the past year, according to commodity analysts at Mintec.
This could cause the price of a suit to rise by as much as 10% as tailors and retailers pass on the hikes to customers, reports said. A wide variety of other clothing, such as cardigans and coats made from wool, may also be affected.
The price of wool has been driven higher after global output hit a 85-year low, exacerbated by flooding and drought which disrupted farming in Australia, the world's biggest wool producer.
Many farmers have moved away from rearing sheep for wool because low prices have made it hard to make a profit in recent years, said Stephen Oldfield of PricewaterhouseCoopers.
Rising demand from emerging economies such as China has also pushed up the price of wool and other raw materials. The market for wool is also being driven higher by commodity speculation, added Mr Oldfield.
He said: "For the consumer, it's a clear sign that commodity price inflation will continue to put pressure on prices at a time when they are trying to save their pennies."