Understanding Roller Coaster Prices of the Cotton Market

Cotton producers have been living in Charles Dickens’s’ A Tale of Two Cities novel for the last two years. Cotton prices have seen extreme highs and disappointing falls throughout an 18-month period, following closely the extreme headlines impacting global economies. Right now, cotton futures are depressed with expectations of a recession and fairly limited global economic growth.

The December USDA supply and demand report explained cotton’s price struggles even from the last four to five months. Lower production, lower consumption, lower exports and price depressing increase in world carryover to 90 million bales. However, values should return to the new crop market once the economy begins to strengthen six months to one year from now.

Read more on the cotton market landscape here.