Cotton Price Plummets as Mills Stop Buying

The cotton price has fallen significantly from its record highs in March because overseas mills have stopped buying the fiber.

Queensland cotton analyst Matthew Leeson says in the last four months the price has fallen from $1,000 per bale to $600. Leeson says negativity on financial markets is also influencing the price with people taking money out of commodities. But he says it's the milling sector's struggle to make money that's really reducing the price.

"These guys are stuck with a warehouse full of quite expensive yarn as well as more cotton coming towards them in the next three or four months," said Leeson. "If they are able to trade their way or spin their way through it, then things should right, but just at the moment, there's a reasonable amount of uncertainty regarding consumption, which will dictate price."

Reprinted from ABC Australia