Cotton Continues its Upward March

A fascinating video is available for viewing to help you understand current conditions at www.bloomberg.com/video/62957562/

I have previously reviewed the loss of the bulk of Pakistans cotton crop, and now news of unending torrential rains in India has estimates for the Indian crop falling short of estimates by 3 million bales. Cotton has broken the $1 per pound mark for the first time since 1995. US mills have been panic buying, fearfull of running short. Subsequently, customers are being rationed shipments.

September rains in India are 122 percent of the 50 year average. In the largest cotton producing state, rainfall is 54% above normal. Global cotton inventories are now at the lowest level since 1996. Subsequently, cotton futures are expected to surge to close to $1.25 a pound by January, another 25% increase.

Worse yet, the cotton crop in China is suffering. Low temperatures and prolonged rains caused a late planting . China will likely increase importation, putting even further pressure on global supply.

Style Source Inc remains committed to offering the best possible pricing and will continue to keep you informed of worldwide developments and how they may affect your product costs for the coming season. It would be wise to build in yet another round of increases in the 3-4% range for the first quarter.