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With passage of time cotton prices expected to rise
31 Mar '09
1 min read
According to a general analysis, cotton price has increased 10-15 percent this year, from that was quoted in the last few months of 2008. This rise in prices has been supported by a few factors which led to this development in 2009.
Amongst the factors are GDP growth, fundamentals of consumption and exports, textile industries in developed economies and surrounding countries, price support from state cotton reserves plan and futures price movements in markets.
All these factors are once again expected to increase the prices of cotton by more than 15 percent in the next few months, though it is unlikely for the hike break through 15 percent, largely due to the effects of the huge cotton state reserves.
If global economic recovery will be seen in the second half and the domestic markets feel the effects of the stimulating plan, the second quarter will turn warmer, leading to an activism in consumer demand in the second half.
With total resources of new cotton reduced, supply shortage will be obvious with passage of time and price trends will indicate upward movement. However, since recovery of global economy is uncertain, cotton prices may face many uncertainties.
Amongst the factors are GDP growth, fundamentals of consumption and exports, textile industries in developed economies and surrounding countries, price support from state cotton reserves plan and futures price movements in markets.
All these factors are once again expected to increase the prices of cotton by more than 15 percent in the next few months, though it is unlikely for the hike break through 15 percent, largely due to the effects of the huge cotton state reserves.
If global economic recovery will be seen in the second half and the domestic markets feel the effects of the stimulating plan, the second quarter will turn warmer, leading to an activism in consumer demand in the second half.
With total resources of new cotton reduced, supply shortage will be obvious with passage of time and price trends will indicate upward movement. However, since recovery of global economy is uncertain, cotton prices may face many uncertainties.
Fibre2fashion News Desk - China
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