With poor weather hurting crops around the world and unrelenting demand for the fiber from the US, Cotton futures rose to the highest in almost a decade.
As per a Bloomsberg Quint report, cotton prices rose by 20 per cent this quarter, the most since March 2011. This also raised the price of cotton garments, adding to inflationary pressures rippling through the global economy this year.
Demand for American cotton continues to increase with China emerging as the largest importer, as per a Robobank International report. This may compel the US Department of Agriculture to increase its estimates for world consumption, adds the report.
Jordan Lea, Senior Trader, DECA Global LLC estimates, prices could increase around $1.12 a pound. While current shipping disruptions are frustrating, a decade ago when prices rose to a record, world reserves were half of what they are now. If prices rise further or shipping snags prevent Asian consumers like Vietnam or Bangladesh from getting the cotton they need, they may turn to polyester to make up for the lack of cotton, adds Lea.
