Cotton prices hit 140 year high

Cotton prices touched their highest level since Reconstruction on Friday, as a string of bad harvests and demand from China spark worries of a global shortfall.

The sudden surge in prices—cotton has risen up to 56% in three months—has alarmed manufacturers and retailers, who worry they may be forced to pass on higher costs to recession-weary consumers.

The December cotton contract hit $1.1980 a pound minutes after the opening of trading on the IntercontinentalExchange Inc. on Friday. It is officially the highest price since records began back in 1870 with the creation of the New York Cotton Exchange.

The Mississippi Historical Society has its own records that show cotton was changing hands at $1.89 a pound during the middle of the Civil War, which lasted from 1861 to 1865. In the early stages of the war, the South halted exports in a failed attempt to draw Europe to its defense. Then later, the North imposed a blockade, crippling the South's ability to ship cotton to Europe. (more)