LUBBOCK, TX – For the first time in ten years, U.S. cotton futures soared past the $1 mark on Tuesday, in part due to good export demand, especially from China.
The last time American cotton producers had a chance to sell fiber at this level was in 2011 when prices shot up above $2 per pound on tight supplies and increased foreign demand ($2.14).
The result was more of a curse to the industry than a blessing as longtime major players like William Dunavant Jr. of Memphis were forced out of the merchandising business due to extremely high margin calls while few producers could capitalize due to a lack of cotton to sell.
The cotton market exceeded the $1 per pound mark just two other times in history: 2010 when the market hit $1.59, and 1995 when it settled at $1.16.
Export demand from China in 2021 was the largest in 8 years as the United States increased market share (almost 50 percent) on commitments made under the Phase One Trade Agreement.
(SOURCE: All Ag News)