• back
  • 1.3.5-THE WORLD COTTON MARKET-STRUCTURAL CHANGES LEADING TO LOWER REAL WORLD COTTON PRICES

  •  
  • Structural changes leading to lower real world cotton prices

    Chapter 1 - The world cotton market - Cotton prices 

     
     

    The price of cotton, adjusted for inflation, is tending downward over the long run. This is a phenomenon common to many primary commodity industries and results naturally and inevitably from market forces in a competitive world economy. If inflation is considered, cotton prices have been falling since the 1950s. Estimates of average prices were more than $3 per pound of lint in today’s dollars in the early 1950s, prices fell to $1–2 in the 1970s, and the average Cotlook A Index in 2006/07 is about 58 cents per pound (see figure 1.26). In nominal prices, or not adjusted for inflation, the Cotlook A Index averaged 70 cents per pound during the 30-year period from 1973/74 through 2002/03 (see figure 1.27). However, while there is always substantial year-to-year variation, average cotton prices during the current decade are forecast to be 10–20 cents per pound lower than the average of the last 30 years.

     

    1.3.5-en1 

    Source: ICAC

     

    1.3.5-en2
    Source: ICAC