Cotton prices are expected to plunge 51% to $1 a pound by Dec. 31, according to the median response to a Bloomberg survey of 14 analysts and traders. Farmers around the world are planting more cotton to profit from high prices.
Cotton rose to $2.197 on March 7, the highest in 140 years of trading in New York, after flooding in Australia and Pakistan and freezes in China ruined crops.
The U.S. Department of Agriculture estimates that cotton crop output may rise 11% next year (beginning August 1), compared with a 3% gain this year.
Analysts are predicting that production will increase from most of the world’s major cotton producers this year, and that the U.S. will plant more than 13 million acres of cotton this season, up from 11 million acres last year.
Hedge funds are already cutting bets on higher prices by the most in three years, the report indicated.
