Title Cotton Price Why Cotton? Because cotton has universal appeal and can be used in many different products, it has been one of more influential commodities. Discovered more than 5,000 years ago, cotton has played a vital role in the rise and fall of many countries. It was one of America’s first cash crops. Cotton is traded in 50,000-pound contracts. It is also traded in cents per pound, so if the market is trading at 53 cents per pound, the contract will have a value of $26,500 ($0.53 x 50,000 pounds = $26,500). Cotton is a staple in many household common goods. think clothing manufacturing, building of raw materials inputs, fabrics, along with hundreds of other products. Changes in the price of cotton and cotton supply can cause a ripple effect in the global economy. That is why our group thought it important to track the price of cotton over the past three decades with sources form the federal reserve bank.

library(tidyverse)
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cotton_data <- read_csv("PCOTTINDUSDM.csv")
## Rows: 315 Columns: 2
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## dbl  (1): PCOTTINDUSDM
## date (1): DATE
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ggplot(cotton_data) +
  geom_line(aes(x = cotton_data$DATE,
                y = cotton_data$PCOTTINDUSDM)) + 
  labs(x = "Date",
       y = "Price of Cotton by Ton",
       title = "Price of Cotton over Time (1990-2020)") +
  theme_classic()

Three large price shocks can be examined as follows: Shock due to global 2009 “Great Recession” and shrinking supply of cotton as quantity demanded increased. In 2011 Indian government imposed a ban on the export of cotton. As India is a major cotton exporter,this caused the global cotton supply to diminish, driving prices upward. 2021 The Trump administration bans the import of cotton from China due to fears of cotton being supplied by the forced labor the ethnic Uyghr population. As of now, the Biden administration has held this ban.

knitr::include_graphics("Screen Shot 2021-11-16 at 2.55.12 PM.png")

Graph One: The United States growing season lead to higher prices. Causes XD line to shift to the right.

knitr::include_graphics("Screen Shot 2021-11-16 at 2.55.04 PM.png")

knitr::include_graphics("USA.jpg")

Graph 2: Excess supply shrank, causing the price internationally to rise due to India’s ban of exportation of cotton.

Graph 3: Domestic prices drop, but internatioanlly, prices will rise. References: Thomas, Lauren. “Cotton Prices Just Hit a 10-Year High. Here’s What That Means for Retailers and Consumers.” CNBC, CNBC, 10 Oct. 2021, https://www.cnbc.com/2021/10/10/cotton-prices-hit-10-yr-high-what-it-means-for-retailers-and-shoppers.html. Federal Reserve Bank Of Saint Louis “Cotton Price Index” “Global Price Of Cotton” www.fred.gov https://fred.stlouisfed.org/series/PCOTTINDUSDM