On the ICE Futures U.S. Exchange, cotton futures for July delivery traded at USD1.5316 a pound during European morning trade, tumbling 2.32%. It earlier dropped as much as 2.33% to USD1.5303 a pound, the lowest price since January 19. ..Cotton prices soared 92% in 2010 due to a global shortage in supplies and surging demand from China. However, prices have plummeted nearly 30% since hitting a record high of USD2.197 a pound on March 7 on concerns high prices and monetary tightening measures in China would lead to reduced demand…China’s cotton imports in March fell 15% percent in March from a year earlier, customs data showed on April 13. Meanwhile, the International Cotton Advisory Committee, a leading industry group forecast that prices of the fiber, “will decline significantly” in 2011-12, while “probably” staying above a 10-year average of USD0.60 per pound…In a report published Tuesday, the ICAC said, “The main reason explaining the recent drop of cotton prices seems to be a significant slowing in demand.” The May forecast is a stark contrast to the projection made in April, when the group said cotton prices would “remain strong” next season, and “remain considerably higher than the 10-year average”…….
Date:5/3/2011
Source:www.bloomberg.com