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The price of cotton is soaring, it currently exceeds 1.30 dollars per pound, it is its highest level for more than 10 years. The drought affecting some producing regions in the United States is raising fears of a drop in the next harvest and pushing prices up.
The United States is the world’s largest exporter and third largest producer of cotton following India and China. The prospect of a drop in US production due to the drought only increases the pressure on a market that has already been very tight for several months due to weak supply and strong demand for cotton textiles.
Northwestern Texas, a state that accounts for 40% of American production, has suffered since the beginning of the year from an exceptional lack of rain, while cotton is very water-intensive. This is bad news, because this crop is planted in the southern United States between March and June depending on the region.
The textile industry impacted
Another factor contributing to the rise in prices, which this time is linked to the conflict in Ukraine: the surge in the price of pesticides derived from petroleum, widely used in cotton growing. Added to this are two phenomena that contribute to the shortage. Textile buyers who stock up to hedge once morest inflation, or even investors who make speculative purchases. Freight is also a real issue. Transport prices have increased significantly and the difficulties in finding containers or boats are disrupting trade.
This creates an impression of lack in the market which is unrealistic, according to experts. Consequence for the textile industry, a shortage and rising costs; the majority of world production is in fact used for the manufacture of clothing products. This will subsequently have an impact on clothing prices.
