Cotton Prices Hit Record High

Advertising Specialty Institude (ASI) Central (10/19/2010)

A variety of factors, including high demand in Asia and disappointing crops in several countries, have driven cotton prices to their highest level since the Civil War. Before trading stabilized yesterday, cotton futures reached $1.19 per pound, an increase of 80% compared to last year. According to the U.S. Department of Agriculture, this is the fifth consecutive season that the global demand of cotton has overwhelmed the supply.

More so than in other years, poor weather in Pakistan, one of the world’s largest cotton exporters, has contributed to atypical prices. As recently as April, Pakistan expected to produce 14 million bales of cotton in the 2010-11 season, compared with about 12.7 million bales in the previous season. Yet, because of unprecedented flooding, government and industry officials now estimate an output of about 11.6 million bales. Further driving up prices, traders also remain concerned that export restrictions in high-producing India will limit the amount of cotton that can be sent to large countries like China, which manufacturers $13 billion of apparel per month.

Faced with the alternative of lower margins, multiple apparel retailers, including Levi Strauss & Co., have already announced price increases. Executives from Kohl’s, Aeropostale Inc. and Guess have also hinted cotton prices are exerting pressures on product cost. Analysts expect retail prices to steadily climb, with the most noticeable markups found in relatively low-cost items like T-shirts, hurting discounters.

The last time cotton prices were this high was during the 1860s, when blockades interrupted the flow of the commodity from the U.S. to Europe. Then, prices reached $1.89 per pound.

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Soaring cotton prices put pressure on inflation

Soaring cotton prices put pressure on inflation Tuesday, 14 September 2010

Soaring cotton prices threaten to put further pressure on inflation amid a chorus of warnings over the likely impact on price tags.

Devastating floods in Pakistan – one of the world’s largest producers – and fears over this year’s crop in China have sent cotton prices surging to 15-year highs in recent weeks.

High street fashion giants Primark, Next and Debenhams have flagged cost pressures as tightening global supplies threaten to push up prices.

The cotton crisis comes at a bad time for retailers, who are already battling against a range of factors, such as higher freight costs, wage inflation in China and the impending VAT hike to 20% in January.

Retail experts at Verdict Research are forecasting that clothing inflation will hit 4.4% in the UK this year – the highest level for 24 years.

And Next sent shivers through the sector when it said last month that prices may rise by as much as 8% in 2011, with budget retailer Primark adding to the woes by cautioning over profit margins in the face of higher cotton costs.

The latest figures show that cotton prices are up 54% year-on-year, with the floods in Pakistan seeing supply fall far short of demand.

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GM cotton crop farmed illegally – Hindustan Times

GM cotton crop farmed illegally – Hindustan Times. This lapse has prompted activists to ask the Committee to activate a “liability clause”, making the developer of a GM crop solely responsible for any leak of unapproved seeds. They fear the same could happen to Bt brinjal, whose commercial release was put on hold by the government on February 8 following safety concerns.

 

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Cotton tops dollar benchmark | Cotton content from Delta Farm Press

Cotton tops dollar benchmark | Cotton content from Delta Farm Press.  Dollar cotton—the stuff dreams are woven of, the Holy Grail of both hard scrabble farms and plantation-sized enterprises, the benchmark that lures typically cautious farmers to wait a few more days to price their crops and, more often than not, catches them in a downward spiral that moves down a lot faster than it moved up.

 

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As Cotton Prices Approach 15-Year High, Clothing Prices May Increase

As Cotton Prices Approach 15-Year High, Clothing Prices May Increase By GIL RUDAWSKY Posted 8:19 PM 08/16/10

The oft-ignored U.S. cotton market has been steadily gaining ground, and today cotton prices are nearing heights not seen in the last 15 years.

Natural disasters in top cotton-producing countries, coupled with an increase in demand for the commodity and a record crop year, spell good news for American cotton farmers. On Friday, the price per bale for December delivery hit $85 — up from a $75 per bale price last month.

“The mills are screaming for cotton,” said Mike Stevens, a cotton analyst and trader based in Manderville, La. “No doubt about it, it’s a bull market for cotton. Prices have absolutely exploded.”

The U.S. is the third largest producer of cotton in the world, next to China and India. Coming in at fourth is Pakistan, whose crops have been wiped out due to flooding. Last week, the U.S. Department of Agriculture World Agricultural Supply and Demand Estimates said cotton losses in Pakistan will reach 700,000 bales. Read More

 

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