Chinese demand for cotton pushed the price of the soft commodity's futures to a record value, Bloomberg reports.
For the second straight day, March-delivery cotton increased the daily limit of 0.05 cents to a record high of $1.5912 per pound on ICE Futures in New York. The world's demand for the soft fiber, which china leads, is believed to trump the supply.
"It's driven by tight supply," Hiroyuki Kikukawa, general manager of research at IDO Securities Co. in Tokyo, told Bloomberg. "The market is extremely overbought and we may see a small correction later this week before the Christmas holiday."
Cotton production in India, considered the second-largest grower of the soft fiber in the globe, is projected to fall short of amounts forecast because of inclement weather. Large amounts of rain will be detrimental to some regions' harvests, according to the Cotton Association.
Rainy weather also might decrease this season's production of cotton in Australia, which is projected to total 3.8 million bales, according to a report by National Australia Bank Ltd. "Indications suggest that crop loss is not major," according to the bank.
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