Restriction of cotton supplies from the world's second-largest exporter of the soft commodity are sending the fiber toward the biggest weekly gain in almost four decades, Bloomberg reports.
As part of an effort to stabilize domestic prices and boost supply, India restricted cotton-yarn shipments at 720,000 metric tons for the year starting October 1, the Asian subcontinent announced on Wednesday. India trails only the U.S. for cotton exportation.
Thus far this year, cotton futures traded in New York have skyrocketed 75 percent. In November, they struck a record amount, which is partially attributable to India's refusal to export enough of the fiber to accommodate increasing demand from various sites in the world.
"India is unreliable," Keith Brown, president of a Moultrie, Georgia brokerage, told Bloomberg. "We haven't solved any kind of problem."
Cotton for March delivery scaled 4.7 percent to $1.3234 per pound shortly after 10 a.m. in New York. That increase was the maximum six-cent limit and converts to an 18 percent gain this week, its largest since July 1971.
The soft fiber has "seen a lot of bullish news with these problems in India this week, and we had some good exports sales last week," Jack Scoville, a vice president at Price Futures Group Inc. in Chicago, told Bloomberg.
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