Cotton price near decade high on demand-supply constraint
Cotton price near decade high on demand-supply constraint

Cotton price near decade high on demand-supply constraint

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Cotton price has jumped 13% in just five days, boosted by supply concerns in the US and strong emerging-market demand

Cotton futures rose for a seventh day to the highest since October 2011, after poor weather hurt crops around the world while demand is rising and global trade is under pressure. 

Cotton for December delivery rose as much as 2.7% to $1.0274 a pound at 6:54 a.m. in New York. Prices have jumped 13% in just five days, boosted by supply concerns in the U.S. and strong emerging-market demand. Gains have also been intensified by traders rushing to cover short positions.

The surge means clothing prices could get more expensive, as manufacturers respond to higher raw-material prices, adding to inflationary pressures already rippling through the global economy this year. 

In cotton, “the market still has the potential to rally further," Commonwealth Bank of Australia commodities strategist Tobin Gorey said in a note. “Market discussion has included whether or not cotton prices might head back to $2. In the current supply context we think that price level is unlikely," he added.


Source: livemint.com

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