NEW YORK – Drought in some parts of Central America pushed the price of cotton to its highest level in more than a decade on Monday.
Vegetable fiber reached $ 1.3171 (approximately 453 grams) per pound in the major U.S. forward contract, up 7 percent from the previous day and nearly 50 percent higher than it was in mid-September. You should go back to July 2011 to find a higher price.
Northwest Texas, which accounts for about 40 percent of U.S. cotton production, has experienced exceptional rainfall deficits since early January. Cotton is planted from March to June, depending on the region. “So the size of the harvest will be very uncertain,” said John Robinson, a cotton expert and professor at A&M University in Texas. Many are already comparing the current weather conditions with the worst drought the United States has ever seen in 2011.
At the time, prices were up to $ 2.27 a pound. This drought is affecting the already tight market as the demand for cotton textiles has increased due to the epidemic and more time is being spent at home. In addition, China, the world’s largest producer and importer by far, has increased its demand. Another phenomenon is the rapid rise in the price of pesticides, which are widely used in cotton cultivation and extraction from petroleum.
While higher cotton prices are expected to lead to a sharp increase in cotton acreage in the United States, the price of pesticides is expected to curb that growth, real estate agent StoneX’s Arlan Suderman told a local PBS station in Iowa. On top of that, according to John Robinson, the wave of speculative purchases is driven by ever-rising prices. “The dynamics are the same as you see with many products,” Orlan Suderman briefly points out to speculative investors. “There is a history of fundamentals and there is a lot of money in chasing inflation.”
This article was previously published on FashionUnited.FR. Translation and editing by Caitlin Terra in Dutch.
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