Worldwide cotton farmers have cut down on the amount of the soft fiber they are planting, which is causing the largest drop in harvests in more than 20 years, according to Bloomberg.
Demand for the soft commodity from China also is waning in lieu of imports that are of higher quality. The International Cotton Advisory Committee indicates crops will fall by 11 percent to 23.2 million metric tons.
“China will want to import some cotton that the world doesn’t have to give next season,” director Peter Egli with Plexus Cotton Ltd. in Chicago told the news source on Tuesday. “Prices will have to go higher to satisfy mill demand and China imports.”
At 11:42 a.m. on Tuesday, cotton futures fell 1.21 percent, a 0.01 cent loss to 0.8191 per pound.
Since notching a record price of $2.197 per bushel on March 7, 2011, the soft fiber has lost 62 percent of its value, Bloomberg reports.
Reuters reports the U.S. Agriculture Department forecast upland cotton plantings in the U.S. are set to dive 23 percent this year in lieu of other agricultural commodities like corn and soybeans.
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