Cotton prices, like those of several agricultural commodities, have reached new highs.
Carlos Chavez / The Arizona Republic / AP / File
Cotton prices hit another record earlier today. As noted by the San Francisco Chronicle:
Cotton for March delivery gained 2.7 percent to $1.5412 a pound on ICE Futures U.S. in New York at 4:15 p.m. Tokyo time. Prices have more than doubled this year, heading for the biggest annual gain since 1973.
Output in China’s Shandong province, the nation’s second-biggest producer, dropped 22 percent this year from 2009 after natural disasters hurt crops, the region’s Agriculture Information Center said in a report Dec. 17. Demand in China is forecast to exceed supply by 17 million bales in the year ending July 31, according to the U.S. Department of Agriculture.
What’s behind this move? Well, judging by everything I’ve read so far, it sounds like good old-fashioned demand (up) and supply (down).