Cotton futures increased beyond the maximum allowed as fierce Chinese demand for the soft commodity fueled speculation that world supplies cannot accommodate the needs of the globe's biggest consumer, Bloomberg reports.
China imported 31 percent more cotton this past January than it did during the same month in 2010. Last year also marked an 86 percent increase in imports as compared to the year prior. In 2010, China imported 2.84 million tons of cotton.
"China wants to import a whole lot of cotton," Louis Barbera, a broker at VIP Commodities in New York, told the news service. "The lack of cotton that we see will not change for the next few months."
Just prior to 2 p.m. on Tuesday, cotton futures were up 1.48 percent, a 2.83 cent increase to $1.9606 per pound.
Cotton futures decreased last week by 5.5 percent, marking its first weekly loss in nearly two months and the biggest decrease in price since November 2010.
"After last week's drop, funds are returning to the market where supplies are very tight," Toshimitsu Kawanabe, an analyst at commodity broker Central Shoji, told the news service.
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