Worldwide cotton warehouses hold large amounts of the soft fiber about 18 months after it pushed to record prices, prompting farmers to plant more, according to Bloomberg.
Cotton harvests will push past demand for a third consecutive year in the U.S., according to the U.S. Agriculture Department. Chinese supplies are forecast to triple over the next two years as demand drops to its lowest rate since 2005 in the globe's largest consumer of the soft commodity. The record price for cotton is $2.197 per pound as established on March 7 of last year.
"There's an awful lot of cotton around," managing director and trader David Wookey with cotton merchant Isis Commodities in England told Bloomberg. "You've got a large stocks situation that's been coupled with weaker global consumption."
At 11:16 a.m. on Tuesday, cotton futures dropped 1.13 percent, an 0.0087 cent slip to 76.39 cents per pound.
Cubbie Station, an Australian cotton conglomerate, is barreling toward a sale to a consortium of Chinese interests, according to The Wall Street Journal. The purchase price for the farming group is estimated to be just south of $300 million in Australian currency.
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