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Cotton prices hits record high

18 February 2011 09:32 (UTC +04:00)

Baku - APA-Economics. Please respect FT.com’s ts&cs and copyright policy which allow you to: share links; copy content for personal use; & redistribute limited extracts, Financial Times reported.

Cotton prices have burst through $2 a pound for the first time, threatening sharp rises in the price of jeans, tee-shirts and other everyday clothing, as mills around the globe race to secure supplies.

Cotton breaks the $2 barrierThe gains to record levels have been stoked by a short-term squeeze as the mills have scrambled to buy futures contracts to fix the prices of physical supplies before Friday, the last available day they can do this on the current March contract.

Veteran traders are warning that prices could rise even further to fresh nominal all-time highs next week, when daily price limits, which restrict price moves to 7 cents a day, are due to be lifted.

On Friday, cotton jumped in electronic trading by its daily price limit of 7 cents to a fresh nominal record of $2.1102 per pound. The market has been largely frozen, trading limit up, since Wednesday.

Cotton prices have risen nearly 45 per cent since the start of 2011 amid a buying frenzy. In real terms, adjusted by inflation, cotton is at its highest level since June 1981.