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Cotton Defies Sell-off in Softs to Hit 7-Month Top

Cotton futures hit 80 cents a pound for the first time in seven months even as many other soft commodities faltered, with a wave of producer selling blamed for derailing the rally in arabica coffee prices.

New York cotton for March delivery touched 80.23 cents a pound at its intraday high on Monday, a gain of 2.1%, and the highest price for a spot contract since June.

The gain took close to 7% the fibre's price recovery so far this year, on a rebound attributed both to fundamental and technical factors.

"We seem to be getting some better ideas on demand," said Keith Brown, at US-based cotton broker Keith Brown & Co, flagging signals that Europe's economy "seems to be turning the corner", while China "is putting in stimulus measures to stimulate the textiles industry".

The textiles sector in China, the top cotton producing and consuming country, has been put under strain by government measures to support prices of the fibre - policies which, while boosting farm profitability, have squeezed margins up the processing chain and driven trade abroad.

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