Cotton prices rose in 2016

Cotton prices increased over the summer and have remained at levels higher than in 2015. The rise can be attributed to several unique factors. One is seasonality; nearly 85 percent of the world’s cotton is produced in areas where only one harvest per year is possible. The market tightened as this warehoused supply dwindled over the past several months due to international factors including Chinese government policies and less cotton available from India and Pakistan. Despite these factors, the global supply is expected to remain at record levels and the kind of price spikes that have occurred in the past are not anticipated.