The harvest of cotton in the globe's second-biggest grower is set to decline due to inclement weather, according to Bloomberg.
India is enduring the worst monsoon in three years, which is drying out fields and cutting into planting of the soft fiber. The challenges run the risk of slashing exports of cotton from the subcontinent for the first time in 36 months. Gujarat, the largest producing state in India, is poised to see reductions of 30 percent for the harvest beginning October 1.
"The outlook for the 2013 crop suggests global supply might be squeezed due to competition for acreage from crops like soybeans, and the weak monsoon in India," states an email authored by analyst Abah Ofon with Standard Chartered to Bloomberg. "Output is being disincentivised at current price levels and we believe global supply will be lower next year."
At 8:59 a.m. on Tuesday, cotton futures fell 0.92 percent, a 0.07 cent slip to 75 cents per pound.
Reuters reports the soft commodity was coming off its highest price in about 10 weeks on Monday as a result of reports of possible restrictions from India, which trails only the U.S. for exports.
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