Cotton prices seen dropping at its lowest in nearly five year

YarnsandFibers News Bureau 2014-07-31 17:00:00 – USA

Cotton farmers although favoured by Mother Nature, but it is not the same for the cotton market with cotton price dropping more than 20 percent just in the past few months. The price was around 85 cents per pound before Memorial Day. It's now as low as 64 cents.


Cotton is growing well across the country, which means supply is up, but a major buyer, China, has a lot of cotton in reserves, so demand is down. The reason of drop in cotton price is due to both supply and demand trend.


Thirty-four-thousand acres of cotton were planted this year in the state, Alabama ranks 10th in cotton production in the U.S.


According to experts, it's the lowest seen in nearly five years. Just to put it in perspective, cotton was trading at 91 cents to 93 cents this time last year. The impact goes beyond farmers. Cotton in Alabama creates more than 2,700 jobs and has an annual economic impact of nearly $300 million. Even with the decrease, farmers believe the drop in price will turn around.


While, as per Brian Hardin, director of governmental and agricultural programs at Alfa they have had several good years with prices and it's just in a cycle where those factors coming together are pushing it down. 64 cents or 65 cents is not what they would like to see for cotton.

Where the price stands now, farmers can't even come close to making a profit.


As per Montgomery and Macon County cotton farmer, the cotton price needs to be above 80 cents, really upper 80's to be profitable. The world will look at it and decide that's just a cheap, good buy and will have people come back in to buy it and drive prices up. Also the cheaper it gets the mill demands should pick up. There are some companies that are building new mills in the United States. They could bring some of their manufacturing technology back here and that could be a huge plus for the future economy.

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