Cotton futures for December delivery briefly hit a nominal high above 119 cents per pound today, before slipping to 115.02 cents per pound, just above Thursday's settling price of 114.87 cents per pound on the IntercontinentalExchange.
That's the highest-ever price in nominal terms, though cotton actually went over 400 cents per pound in real, inflation-adjusted terms in 1973.
Sources report that the big surge in demand is coming from China, where cotton futures have gone to over 160 cents per pound as imports rise. "The Chinese have been running down their own domestic stocks," Wayne Gordon, an analyst at Rabobank Groep NV, told Bloomberg News in a phone interview. "They're going to have to buy at the global market to replenish that."
Another factor affecting the markets is the continued problem of Pakistan's demand for cotton – it needs the fiber to keep its domestic garment industry, a pillar of its economy, running smoothly.
But with the nation's fields ruined by torrential rainfall, Pakistanis must turn to imports from the global markets.