US drought pushes cotton prices to ten-year high
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The plant fiber reached $1.3171 per pound (about 453 grams) on the key US futures contract, the highest since July 2011.
Depending on the region in the United States, cotton is planted from March to June, so there is uncertainty in the market about size of this year's crop, according to John Robinson, a professor at Texas A&M University and cotton specialist.
In addition, there has been a demand increase in China, by far the world's largest producer and importer.
Another contributing factor is the soaring price of pesticides, which are widely used on cotton farms and are derived from petroleum.
While high cotton prices were expected to lead to a sharp increase in US acreage, the cost of pesticides is expected to limit that growth, Arlan Suderman of broker StoneX told the local PBS station in Iowa.
Added to that is a wave of speculative buying, driven by accelerating prices, Robinson said.