Thursday, November 20, 2008

Weil Brothers & Stern to Cease Business

Today we received more troubling news when Weil Brothers & Stern announced it will exit the cotton trading business. The fact that such a concern with over a century of experience in the cotton business is forced to cease operations adds to mounting fears that rough times are ahead for cotton textiles and apparels industries.

Spokesmen for the company blame the situation on the high level of risk and unpredictability that has been introduced into the cotton market. Analysts cite inflated prices that reached a 12-year high in March 2008, fanned by commodities traders and cotton shortages (as farmers switched to profitable crops like corn), and came crashing down to a six-year low this month.

About Weil Brothers & Stern, from their website: "Together with our US affiliate, Weil Brothers-Cotton Inc. of Montgomery, Alabama, Weil Brothers & Stern Ltd. buys cotton from virtually every growing country and ships and sells to virtually every consuming country, utilising our world-wide network of offices and agents, with many of whom we have been working for several generations."

Bloomberg News

Weil Brothers & Stern Website