Wednesday, 18 March 2015 01:55
NEW YORK: Cotton on ICE Futures US fell to a six-week low in light volume on Tuesday amid concerns about demand in top-consumer China and a broad selloff in commodities led by crude oil.
The front-month May cotton contract on ICE closed down 0.28 cent, or 0.5 percent, at 60.21 cents after falling as low as 60.19 cents, the lowest for the front-month since Feb. 3.
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The drop came after China’s Cotton Association said on Monday the country had imported 159,100 tonnes of cotton in February, down 35.3 percent the prior year.
This brought the total for the first six months of the 2014/15 crop year, which ends in July, to 881,700 tonnes, down 47 percent from the prior year. “Cotton is reeling from slow Chinese business,” said Keith Brown, proprietor and cotton trader at Keith Brown and Co in Moultrie, Georgia.
Concerns about Chinese demand have weighed on prices in recent months, after the country announced an overhaul of its cotton stockpiling program, which had supported the market.
Beijing has also issued fewer import quotas, prompting the chairman of one of the country’s largest textile companies to call for greater imports to meet the industry’s demand for higher-quality cotton.
Tuesday’s losses came amid a broader sell-off in commodities, which may have prompted some of the retreat from fiber futures, Brown added.
The bellwether Thomson Reuters/Core Commodity CRB index dropped to its lowest in five years.
In addition, prices for soybeans and corn, which compete with cotton for acreage in the United States, fell sharply on Tuesday, raising the possibility that US farmers may plant more acres of cotton than previously expected, Brown said.
Copyright Reuters, 2015
