Strange News! Cotton Price Is Highest In 140 Years.

New York Futures Exchange (ICE) cotton futures in December rose to $1.1980 a pound last week, marking the highest nominal price in the 140 years since the establishment of the New York exchange and its predecessor, the New York Cotton Exchange (ICE).

However, in real terms, the current price is still less than 1/3 of the price hit in 1973.

Cotton prices surged 48% this year, strong demand, but production declined, resulting in tight short-term supply of cotton.

With the recovery of the world economy, China's cotton consumption has increased greatly in the world's largest cotton consuming country. However, because of the poor climate, its cotton production has been reduced, and the textile industry has been buying cotton abroad. China's cotton imports this year are more than doubled than in 2009.

"From the consumption point of view, China is an elephant," said ACSA, director of the American cotton carrier Association.

Pakistan, the world's fourth largest cotton producer, has also been hit by floods, which has also hit the country's cotton harvest.

Meanwhile, high cotton prices have worried the market that India may extend the ban on cotton exports. India has become a major cotton producer since the adoption of genetic improvement technology.

For this reason, the global stock of cotton this year may decline by 5% to the lowest level in 14 years.

For the apparel industry, cotton prices continue to represent the era of cheap cotton in the past 20 years, but consumers are accustomed to cheap clothing, making it difficult for manufacturers to pass on costs, especially when the economy is in recession.

Raw materials account for about 1/4 to half of the cost of clothing production.

The most difficult ones are discounted retailers who sell large quantities of cotton products such as T-shirts and often face price competition.

But manufacturers who produce apparel at various prices may be forced to decide whether to absorb or pfer costs themselves.

Next, a UK based clothing retailer, warned last month that heavy cotton prices coming from the world will hit a new high in 2011, rising by 56% in three months.

Apparel manufacturers and retailers are nervous and fear that sales will suffer when forced to shift costs to consumers who are in deep recession.

New York Futures Exchange (ICE) cotton futures in December rose to $1.1980 a pound last week, marking the highest nominal price in the 140 years since the establishment of the New York exchange and its predecessor, the New York Cotton Exchange (ICE).

However, in real terms, the current price is still less than 1/3 of the price hit in 1973.

Cotton prices surged 48% this year, strong demand, but production declined, resulting in tight short-term supply of cotton.

With the recovery of the world economy, China's cotton consumption has increased greatly in the world's largest cotton consuming country. However, because of the poor climate, its cotton production has been reduced, and the textile industry has been buying cotton abroad. China's cotton imports this year are more than doubled than in 2009.

"From the consumption point of view, China is an elephant," said ACSA, director of the American cotton carrier Association.

Pakistan, the world's fourth largest cotton producer, has also been hit by floods, which has also hit the country's cotton harvest.

Meanwhile, high cotton prices have worried the market that India may extend the ban on cotton exports. India has become a major cotton producer since the adoption of genetic improvement technology.

For this reason, the global stock of cotton this year may decline by 5% to the lowest level in 14 years.

For the apparel industry, cotton prices continue to represent the era of cheap cotton in the past 20 years, but consumers are accustomed to cheap clothing, making it difficult for manufacturers to pass on costs, especially when the economy is in recession.

Raw materials account for about 1/4 to half of the cost of clothing production.

The most difficult ones are discounted retailers who sell large quantities of cotton products such as T-shirts and often face price competition.

But manufacturers who produce apparel at various prices may be forced to decide whether to absorb or pfer costs themselves.

Next, a UK based clothing retailer, warned last month that "heavy cost price pressures from around the world will come from 2011". Next year, prices will rise by 5% to 8%.

Tunick, executive director of JP Morgan chase, said that the rise in cotton prices and pressure on sales and inventories could lead to a big profit for apparel monopolistic operators.

The background of rising cotton prices is the rise in commodity prices this year, mainly due to the depreciation of the US dollar, the strong demand in emerging markets, and the shortage of supply caused by climate problems.

In addition to cotton, the price of sugar, orange juice and coffee has also soared.

The Reuters /Jefferies CRB index, which tracks raw material prices, reached a two-year high last week.

But the high cotton price is a happy event for cotton farmers.

Over the years, they have often abandoned cotton instead of corn and soybeans for profit consideration.

The cost price pressure will increase by 5% to 8% next year.

Tunick, executive director of JP Morgan chase, said that the rise in cotton prices and pressure on sales and inventories could lead to a big profit for apparel monopolistic operators.

The background of rising cotton prices is the rise in commodity prices this year, mainly due to the depreciation of the US dollar, the strong demand in emerging markets, and the shortage of supply caused by climate problems.

In addition to cotton, the price of sugar, orange juice and coffee has also soared.

The Reuters /Jefferies CRB index, which tracks raw material prices, reached a two-year high last week.

But the rise in cotton prices is a good thing for cotton farmers. Over the years, they often give up cotton and grow crops such as corn or soybeans for profit consideration.