Farms.com Home   News

Cotton Price Slips As Global Economy Falters

A Cotton prices are softening along with the global economic outlook.

Major institutions and recent economic data have been pointing to weaker growth this year, and that could hurt demand for cotton textiles and clothing.

The March cotton contract on the ICE Futures U.S. exchange fell 2.5% last week, settling at 59.23 cents a pound.

The World Bank on Tuesday lowered its 2015 global economic growth forecast to 3% from an earlier 3.4% projection. Then on Wednesday, the Commerce Department reported a seasonally adjusted 0.9% decrease in December sales at retailers and restaurants in the U.S. from the previous month.

The reports fanned worries about demand at a time when the world has a surplus of the fiber. The U.S.a€”the worlda€™s largest cotton exportera€”is expected to produce 16.1 million bales during the year that ends July 31, up an estimated 25% from the previous year, according to the U.S. Department of Agriculture. The production forecast is up 1% from the USDAa€™s previous prediction of 15.9 million bales.

Federal forecasters also recently upped their projection for the amount of cotton left over in warehouses around the globe at the end of the current season to a record 108.6 million bales. Each bale weighs 480 pounds, or 217 kilograms.

a€œThe supply and demand numbers werena€™t helpfula€ for cotton prices, said Sharon Johnson, a senior cotton specialist with Wedbush Securities in Atlanta.

Lower demand is largely stemming from Chinese millsa€™ a€œsluggisha€ response to falling domestic cotton prices, the USDA said. China is the worlda€™s biggest cotton consumer.

Still, the tide appeared to be turning during the week ended Jan. 8. Weak prices began to stimulate new demand for the fiber.

Click here to see more...

Trending Video

Virtual Fencing

Video: Virtual Fencing

We're diving into a cutting-edge technology, virtual fencing. This innovation has caught the attention of cattle producers in recent years. During our visit to the Gudmundsen Sandhills Laboratory last summer, we were treated to a demonstration showcasing how this technology can assist cattle producers. Let's take a closer look.