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The Hard Truth About a Soft Substance

Revisiting the Cotton Crisis nine months after HTT's first look at the subject shows some things have changed radically ... and some not so much.
     In an effort to present some facts about the subject of cotton, HTT once again has produced a timeline showing cotton prices, both in real dollars of the time and in inflation-adjusted prices, going back to 1980.
     You don't need to be a statistician to see what's happened to the price of cotton. In real dollars, cotton is the most expensive - by far - it's ever been over this period. However, the current price, around $1 a pound - give or take or couple of bowls - is less than half the price cotton was just six months ago. But even at that level - our time line below only runs through June 2011 and so does not reflect the most recent reductions in prices - cotton is at historical highs versus the past several decades.
     It's when you add on inflation that the pricing picture gets a little more complicated. It does show that in the early 1980s, when adjusted for inflation, cotton was more expensive than it is today, or at its winter-time peak. But just barely.
     The take-away from this pricing chart is clear that no matter what the ups and downs of the decades: Cotton remains expensive.
     We also repeat two charts from our earlier report: Where cotton comes from and where it goes to endusers.
     Put all of this information together and you've got the basis for some pretty lively market-week conversations, don't you think?

Cotton Pricing 1980-2011 That Was Then, This is Now

The next time you see this chart, the lines will be trending down but for now cotton is as high as an elephant’s eye.
Cotton Pricing 1980-2011 That Was Then, This is Now
  

Where the Cotton Comes From

Where the Cotton Goes

More than half of the world's cotton now comes from Asia

Unlike the good old mill days, very little cotton is used in the United States

Where the Cotton Comes FromWhere the Cotton Goes
Source: U.S. Department of Agriculture, 2010 Estimates
Source: International Cotton Advisory Committee

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