Cotton futures soared beyond $1 per pound for the first time in nearly a decade as bad weather and shipping snafus threaten supplies, driving up global garment prices.
Crops in various key-growing countries are experiencing difficulties, ranging from rain-soaked fields in the United States to bollworm-infested areas in India. Simultaneously, cotton purchasers require more of the fibre. Mexico and China are making record purchases. High freight charges and geopolitics are also presenting problems for supplies, with international outrage over labour breaches in Xinjiang, China’s largest producing province. Imports were prohibited in the United States early this year.
The price of cotton has risen to $1.0155 a pound for December delivery, the highest since November 2011. The price has surged 28% this year, and traders are rushing to cover short positions. The spike is significant, but likely won’t surpass the $2 level reached in 2011, analyst Louis Rose says.
