Home > Agriculture > Price of Cotton surges to highest levels in 15 yrs

Price of Cotton surges to highest levels in 15 yrs

Cotton futures extended their rally to the highest price in more than 15 years on rising demand from textile mills. Delayed harvests and booming demand in Asia are cutting into supplies. According to reports, December-delivery cotton advanced 0.8% to 96.56 cents a pound, the highest price since June 1995 on ICE Futures U.S. in New York. 
Prices have surged 33% since the beginning of the year due to bad weather in China, which is both the world’s No. 1 grower and importer, and the flooding that has washed out Pakistan’s fields. Global cotton inventories are estimated to fall 22% from a year ago as demand outstrips supply, according to the U.S. Department of Agriculture.
The China Cotton Association warned the industry to stay rational and not to follow the speculators. The Chinese government is considering allowing the country’s cotton merchants to import more cotton by easing restrictions on its imports, according to the association.
High prices are a boon for producers in the US, which is the world’s biggest cotton exporter. The US is shipping at a frenetic pace to keep up with the rising demand. Exports sales have already exceeded half of the 15.5 million bales the US is expected to produce.

Source: Bloomberg

Categories: Agriculture
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