Renewed Chinese demands for cotton prompted the soft commodity's rebound from a three-session slump, Bloomberg reports.
Cotton output in China, the globe's largest consumer of the fiber, is projected to slip as much as 5.5 percent due to damaged crops and inclement weather, according to a research company cited by Bloomberg.
"Prices look quite good compared to what they looked like two weeks ago," John Flanagan, the president of Flanagan Trading Corp. in Fuquay-Varina, North Carolina, told Bloomberg. He said the rebound indicates "a dawning reality that we probably still need more cotton."
Cotton for March delivery increased 3.2 percent on ICE Futures U.S. in New York just before 11 a.m. During the past three sessions, the price of cotton sank 13 percent, representing its largest decrease since March 2008.
Prior to Wednesday, cotton had surged 48 percent thus far this year as a result of a fierce demand from China and plummeting U.S. inventory of the fiber.
"I can see supplies remaining tight next year in China," Gary Raines, an economist at FCStone Fibers & Textiles in Nashville, Tennessee, told Bloomberg.
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