Record Cotton Prices

Cotton rallied to a new post-Civil War closing high Monday as voracious demand in China and concerns over this season's tight supplies sent prices soaring. Cotton prices have more than doubled since the start of 2010, and the gains are expected to be passed on to consumers as early as next year as some major apparel companies mull price increases. "We expect that we will have select price increases across our portfolio of brands next year," VF Corp. (VFC) spokeswoman Cindy Knoebel said in an email. She said the company, which produces The North Face, Lee and Wrangler, has not yet decided which brands will be affected. Cotton for March delivery, the most actively traded contract, closed 4 cents higher, the exchange-permitted daily limit, on the IntercontinentalExchange on Monday, at $1.5412 a pound, up 2.7%. Earlier this month, the U.S. Department of Agriculture cut its estimate for the U.S.'s end-harvest cotton stockpile to 1.9 million bales, which many in the industry say is a paltry amount to see the country through until the following harvest in the Fall. Further limits on cotton from India, the world's No. 2 producer and second-largest cotton exporter after the U.S., also supported a bullish run...more