US cotton prices rise to a decade high

U.S. cotton prices rose to a decade high.

On March 21, closing the session, the price of cotton in the US rose to the highest level in more than a decade due to a prolonged drought in the central part of the country.

According to AFP news, the price of US cotton futures has reached more than 1.3 USD / pound (1 pound = 0.454 kg), the highest level since July 2011.

John Robinson, a professor at Texas A&M University and a cotton expert, said that depending on the region in the US, cotton is grown from March to June every year, so the yield. Cotton harvested this year in this country is not stable.

Also according to this expert, compared with 2011, when US cotton producers experienced the most severe drought up to that time and cotton prices increased (2.27 USD/pound), the drought This time has impacted a scarce capital market due to an increase in demand for cotton related to the COVID-19 pandemic – as people spend more time at home to prevent disease.

In addition to the drought, an increase in demand for cotton in China – the world’s largest cotton producer and importer – has also driven up cotton prices in the US.

Along with that, another factor contributing to the increase in cotton prices in the US is the increase in prices of pesticides. In this regard, Arlan Suderman of brokerage StoneX Group said that while the increase in cotton prices is expected to lead to a sharp increase in cotton acreage in the US, an increase in the cost of purchasing pesticides is considered. factor that will limit the cultivation of this crop.