Should the Dead Be Shrouded in White Cloth?
Question

Is it permissible to shroud the deceased in a colour other than white?
Praise be to Allah.The Sunnah of Shrouding the Dead in White Cloth
The Sunnah is to shroud the deceased in white cloth, because of the report narrated by Ibn `Abbas (may Allah be pleased with him), who said: The Messenger of Allah (blessings and peace of Allah be upon him) said: “Wear white garments, for they are among the best of your garments, and shroud your dead in them.” (Narrated by Abu Dawud, 3878; classed as authentic by Al-Albani in Sahih Sunan Abu Dawud)
It was narrated that Samurah ibn Jundub said: The Messenger of Allah (blessings and peace of Allah be upon him) said: “Wear white, for it is cleaner and purer, and shroud your dead in it.” (Narrated by At-Tirmidhi, 2810; classed as authentic by Shaykh Al-Albani (may Allah have mercy on him))
It was narrated from `A’ishah (may Allah be pleased with her) that the Prophet (blessings and peace of Allah be upon him) [was shrouded] in three pieces of white cloth. (Narrated by Al-Bukhari, 1264 and Muslim, 941).
Scholarly Consensus on Shrouding Using White Cloth
An-Nawawi (may Allah have mercy on him) said: “White” indicates that it is recommended to shroud the dead in white, and there is scholarly consensus on that. (End quote from Sharh Muslim)
If a person is shrouded in something other than white cloth, it is permissible, but it is disliked.
Is It Permissible to Use Colored Cloth for Shrouding?
An-Nawawi (may Allah have mercy on him) said: It is disliked to use dyed cloth and the like that are worn as adornment. (End quote)
In Al-Mawsu`ah Al-Fiqhiyyah (13/238) it says:
It is also disliked to shroud the dead in cloth dyed with saffron or safflower, or cloth made of camel hair or wool, when  it is possible to use something else, because that is contrary to the practice of the early generations. (End quote)
For more details, please see the following answers: 98308, 98189, 98409, 72303, 39201.
And Allah knows best.