Drought In The United States Caused Cotton Prices To Hit A Decade High

The Swiss "times" reported on March 22 that the long-term drought in the central part of the United States caused cotton prices to reach a 10-year high of $1.3171 on Monday, up 7% from the previous day and nearly 50% from mid September.

Northwest Texas produces about 40% of the U.S. cotton production. Since January this year, rainfall has been unusually scarce, "so the scale of the harvest will be very uncertain.". John Robinson, a cotton expert and professor at Texas A & M University. Generally, the planting season of cotton is from March to June every year. Many believe that this year's situation is similar to the worst drought in the United States in 2011, when cotton prices rose to $2.27/lb. The drought has hit an already growing demand for cotton. As the world's largest cotton producer and importer, China's demand is accelerating.

At the same time, the price of pesticides as oil derivatives is also soaring. Alan Suderman, a broker at stonex group, a US financial services firm, said the high price of cotton may help to boost the increase in cotton acreage in the United States, but the cost of pesticides may limit this growth on the other hand.

(source: website of the Ministry of Commerce)