Supply and Demand Cotton Edition

Cotton prices are up about 80% this year. Here's a chart of the "A" Index from January 2009 to October of 2010. The index is a proxy for the world price of cotton and is available here.


What's driving the price increases:

Cotton prices have been driven higher by demand from developing countries, notably China and India, where rising wealth is boosting consumption patterns. Mother Nature is also to blame, with the deadly floods in Pakistan and heavy rains in China damaging many crops and limiting cotton supply.