Slowing demand of cotton will prompt a seasonal shortage of the soft fiber that is 24 percent smaller as compared to what was originally forecast in March, according to an industry analyst based in England.
Bloomberg reports the reduced demand is attributable to the whims of China, which is the globe's biggest buyer and generator of the commodity, a report from Cotlook states. For the season ending July 31, the demand from China is 9.8 million tons, which is 188,000 tons less than the amount that was originally projected. Consequently, the new estimate is 414,000 metric tons, which is lower than the 548,000 originally forecast.
"Statistics confirm recent anecdotal reports of slowing mill consumption of raw cotton on various markets," the Cotlook report states.
Cotton futures closed Monday having slipped 0.67 percent, a 0.0112 cent drop to $1.6639 per pound.
During the past year, cotton futures have nearly doubled, which analysts attribute to a global shortage of the soft fiber.
"A significant recovery in world supply remains in prospect during 2011-12," according to the Cotlook report.
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