En route to marking its largest annual gain since the early 1970s, the soft fiber runs the risk of falling short of China's demand. China, as the world's largest consumer of cotton, is contending with shortages, rising production costs, and inflation, all of which impact the commodity's price.
"Cotton prices have been underpinned by the U.S. forecast for declining stockpiles and China's rising demand," Han Sung Min, a broker at Korea Exchange Bank Futures Co. in Seoul, told Bloomberg.
March-delivery cotton rose 0.05 cents, which is the maximum allowed on the Comex. That 3.5 percent increase raised the price to $1.4597 per pound just after 9:30 a.m.
"Concern about India crop coupled with Chinese demand is helping prices stay strong," Chris Kramedjian, a risk- management consultant at FCStone Fibers & Textiles in Nashville, Tennessee, told Bloomberg. "Also, there is overall bullishness in the market."
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