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Cotton prices set all-time high on supply fears

16 October 2010 11:39 (UTC +04:00)

Baku â€“ APA-Economics. Cotton prices edged lower after setting a record high Friday, as poor weather in several countries has left tight supplies even as demand grows stronger worldwide, BusinessWeek reported.

Cotton for December delivery fell 5 cents to settle at $1.0987 a pound after hitting a record $1.1980 a pound.

It was the highest level for cotton since cash prices paid to farmers during the Civil War when blockades prevented shipments from leaving the South, said Sharon Johnson, a senior cotton analyst at Penson/FCG.

"As long as I’ve been involved in this I’ve never seen anything like this," said Johnson, who has worked in the cotton market since the mid-1980s.

In the past three months, cotton has rallied from a low of 73.01 cents a pound after adverse weather in Pakistan, India and China delayed or reduced the size of crops there.

That has boosted U.S. cotton exports with farmers about one-third of the way through the current harvest. "We find ourselves with mills continuing to try and find cotton at any price," Johnson said.