Futures Market News
Tightening cotton supplies prompt export rush
Dec 02, 2010 02:34 PM
Indications of increased demand spurred prices for cotton to rise for the second-straight day on ICE Futures U.S., Bloomberg reports.
While global supplies of cotton constrict, exporters of the soft fiber in the U.S. took orders for nearly 13 million bales of upland cotton for year ending July 31. That figure represents more than twice the amount from the same period of 2009. Thus far this year, cotton futures have increased 61 percent.
"We're exporting so much cotton we can't get it out of the country fast enough," Louis Barbera, a broker at VIP Commodities in New York, told Bloomberg. "The physicals are almost all the way committed."
An independent analyst in Louisiana echoed the broker's assessment. The total amount of export sales of cotton has been "much better than anticipated," the analyst said in an email to Bloomberg.
The Agriculture Department estimates this year's deficit for cotton in China will be 17 million bales. Global exports of the soft commodity are projected to increase more than 8 million metric tons for year-ending July, an increase of more than 6 percent since last year.
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