The Strategist

Cotton prices hit a ten-year high

10/06/2021 - 06:45

Cotton futures on the US commodities exchange ICE hit $1.05 a pound.

According to The Wall Street Journal, this is a record high for the period since September 2011. Analysts believe that the rise in cotton prices is due to increased demand from Chinese producers, despite restrictions on the supply of some goods and raw materials from the United States imposed during the Donald Trump administration.

The US Department of Agriculture estimates that Chinese demand for cotton will increase by 24% this year due to a rebound in consumer demand and increased production of apparel and consumer goods following the lifting of the coronavirus restrictions.

Peter Egli, director of risk management at trader Plexus Cotton Ltd, points out that China is actively buying cotton not only from the US, but also from India. At the same time, experts do not rule out that if cotton prices on global exchanges continue to rise, we can expect an increase in prices for clothing as well, especially if it is produced in China, or replacement of cotton with synthetic materials.