Cotton prices hit a new low in five years

Since the record high in 2010, the price of cotton in recent days has fallen to the lowest level in five years.

The cotton price for delivery orders in December was 49.69 euro cents per pound (62.59 cents). This price only dates back to October 7, 2009. China announced that it would reduce its import volume, so cotton prices have fallen by 26% compared with last year.

The U.S. Department of Commerce said a few weeks ago that the market is in a full transitional stage. Huge cotton stocks are sufficient to meet China's demand in the next four to five years. Only after this stage will China return to the market and re-initiate a price increase.

Do not forget that the cotton price crisis that shocked the textile industry in 2010 was largely attributable to China. As China expects the price of cotton to increase, it will purchase a large number of stocks, which will push up cotton prices, while other countries will look for opportunities to purchase the remaining cotton stocks.

For now, one of the obvious consequences of low prices and China's exit from the cotton trading market is that India will overtake China in cotton production. India's cotton production reached 30 million bales, compared with 29.5 million bales in China this year, compared with 32 million bales last year.