Wednesday, May 3, 2017

Cotton Pricing Update

Not too long ago (March, 2011) Cotton Pricing went crazy and - at that time - was showing no signs of cooling off.

But, as we can see with hindsight it was a classic supply and demand bubble at the time.  Poor returns for producers meant lower production and as such pushed prices up.

Cotton prices have normalised to a sustainable level for consumers and have stayed there for some time.

At present, there's nothing in the immediate future that will impact pricing.

However, the longer term story is quite different and pressures will come from a number of areas :

  • changing attitudes by consumers towards single use plastic bags
  • reductions on arable land
  • competition from other crops
  • specific climate events
  • overall climate change (sea levels, drought/flood)
I'd say that cotton pricing will be about $145.00 by June 2019.

1 comment: said...

Prices were normalized only when they managed to balance supply and demand in the market.