Cotton price hits new high

Dhaka,  Fri,  22 September 2017
Published : 15 May 2017, 13:49:20

Cotton price hits new high

Hedge funds have clung to an overwhelmingly bullish position in cotton, with 10 purchases for every sale in US futures, according to a global market report Monday.

To cotton market veterans, the intense rally recalled a 2008 price spike that knocked some of the industry’s oldest names out of business. The international cotton trade is led by trading houses such as Louis Dreyfus, Cargill, Glencore, and Cofco Agri.

The rally was sparked by USDA estimates showing US cotton stocks would dwindle to 3.2m bales before the autumn harvest. A bale weighs 480lb.

But Beijing has begun selling off cotton stocks and global consumption will increase about 2 per cent this year to 24.6m tonnes as the world economy strengthens, according to the International Cotton Advisory Committee, an intergovernmental group in Washington.

Mills in countries such as India, Pakistan, and Vietnam have increased imports of US cotton nearly 60 per cent this year, according to the US Department of Agriculture.

- SZ
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