As China hoards its cotton supply for its textile mills, cotton futures gained on the decreased global supply outlook, reports Debarati Roy for Bloomberg. The bad weather in China has reduced cotton yields in China, which will force mills to import more cotton. Cotton prices have surged 79% so far this year. China accounts for 40% of global cotton output.
Additionally, hailstorms have damaged crops in Texas and a potential tropical cyclone may damage damage cotton crops in India, the world’s second-largest producer. [Crop Shortage a Boon for Agriculture ETFs.]
For more information on agriculture, visit our agriculture category.
As a result of soaring prices, the top six ETFs in the last month are all agriculture and soft commodities related. [Commodity ETFs That Are Beating Gold.]
- iPath DJ-UBS Cotton TR Sub-Idx ETN (NYSEArca: BAL), up 41.1%
- iPath DJ-UBS Sugar TR Sub-Idx ETN (NYSEArca: SGG), up 34%
- iPath DJ-UBS Agriculture TR Sub-Idx ETN (NYSEArca: JJA ) up 20.3%
- Teucrium Corn (NYSEArca: CORN) up 19.5%
- iPath DJ-UBS Grains TR Sub-Idx ETN (NYSEArca: JJG) up 17.5%
- ELEMENTS Rogers Intl Commodity Agri ETN (NYSEArca: RJA) up 16.9%
Max Chen contributed to this article.