Have High Cotton Prices Deferred, or Destroyed, Demand?

Whether high cotton prices of 2010-11 deferred cotton demand, or destroyed a portion of it, is an uncertainty the cotton market will tackle in the coming months, according to Joe Nicosia, CEO of Allenberg Cotton Co., featured speaker at the Cotton Roundtable in New York City in July.

Nicosia said during the event held at the Intercontinental Exchange in Downtown Manhattan that 3 million to 4 million bales have been replaced with polyester in response to record high prices in 2010-11. It amounts to a 2 percent to 3 percent change in the cotton-to-polyester blend percentage.

“Now that cotton prices have fallen back and are much closer to polyester prices, will some of this demand come back to cotton? Or will consumers find manmade fibers acceptable now that they’ve tried them in alternative applications. How much has been deferred and how much has been lost.”

Nicosia said the market performed as it needed to in 2010-11 with prices climbing high enough to produce “a needed downward shift in the demand curve for cotton to get us through extremely tight stocks.”

http://growinggeorgia.com/crops/2471-have-high-cotton-prices-deferred-or-destroyed-demand