Cotton is now at a 15-year high and is 50 per cent dearer than this time last year.
The rise is blamed on floods in China and Pakistan, which have driven the price of raw cotton up from ten cents a pound to 83 cents a pound in the past month.
It is likely to hit hardest at budget chains, such as Primark, where cotton accounts for a larger slice of business overheads.
Primark finance director John Bason refused to speculate on just how much prices might rise but warned: ‘The pricing environment is a tough one for the consumer.’
The budget chain is the latest in a series of British clothing retailers to warn about the impact of cotton prices. Next, H&M, Levi Strauss and Wonderbra owner Hanebrand have also raised similar concerns.
Primark, famous for £2 T-shirts and £4 jeans, confirmed it would be putting up prices, although it blamed that in part on the increase in the VAT rate to 20 per cent.
Parent company AB Foods said sales were up six per cent during the past year but predicted worse figures for the 12 months ahead.
Consumer campaigners urged retailers not to use Pakistan’s floods as an excuse for higher prices – nor to cut back on what they pay poverty-stricken suppliers.
Dominic Eagleton, from Action Aid, said: ‘For years, major retailers have been telling us they want to put prices up to help foreign workers – but don’t want to upset customers over here. This statement, though, would suggest that, when it suits companies, they can raise prices after all if they want to.’
