Sharp decline in cotton prices: Dropped by 15.7 percent in September
Due to global economic growth concerns and demand issues, cotton prices experienced their fastest monthly drop in September since September 2022.
As a result of global economic growth concerns, the El Nino effect, and demand from China falling short of expectations, cotton prices recorded a notable decline of 15.7 percent in September.
Sharp Decline in September
Developments in the global economy and climatic conditions continue to play a decisive role in the course of cotton prices this year. The price of a pound of cotton fell by 15.7 percent in September, recording its fastest monthly decline since September 2022.
Price Trend Throughout the Year
The price of a pound of cotton lost 1.7 percent in value in January. Following a volatile course in the subsequent months due to increasing geopolitical risks and weather-related concerns, prices rose up to $0.9374 in August.
Value Gain Compared to the Beginning of the Year
Starting the year at $0.60, a pound of cotton finished September at $0.7852. Despite the sharp monthly drop, cotton prices maintained a 30 percent value gain compared to the beginning of the year.
Economic Growth and Interest Rate Concerns
Futures and commodity markets specialist Zafer Ergezen stated that one of the main reasons for the drop in prices was concerns regarding global economic growth. He noted that interest rates remaining at high levels increased anxieties regarding cotton demand.
Climate Factors Affecting Supply
The El Nino effect and the decrease in monsoon rains in India were among the key factors negatively affecting cotton supply. This situation directly impacted the balances in the market.
Demand and State of the Markets
Saxo Capital Head of Commodity Strategy Ole Hansen stated that prices dropped sharply in September due to narrowing yarn production margins, weak orders, and the abundant availability of affordable Brazilian cotton.