Shortly after 10 a.m., cotton futures were up 1.61 percent, a 0.0278 increase to $1.75 per pound. The commodity has risen three straight sessions and for two straight days it has increased the maximum allowed on the exchange limit.
"At the moment, supply is extremely tight," Hiroyuki Kikukawa, general manager of research at IDO Securities in Tokyo, told Bloomberg. "Nothing can stop the current runaway price for the time being."
The world's fourth-largest grower of cotton, Pakistan, is staring at a shortfall of 2.5 million bales after floodwater destroyed its fields in July and August. Exporters of the commodity in India are not shipping 750,000 bales, which forced Pakistan to purchase from other countries.
"Supply should increase given higher prices, but demand will remain strong," according to a January 31 report penned by analyst Evren Kopelman of Wells Fargo Securities. China "continues to aggressively buy at high levels in order to ensure delivery of cotton to meet robust demand."
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