Cotton Futures Rise to Highest Level Since 1995 as Global Supplies Dwindle

Cotton extended a rally to the highest price in 15 years amid tightening global supplies. Orange-juice prices also rose.

India, the world’s second-biggest cotton grower, plans to delay registration of export contracts by two weeks until Oct. 1. The condition of the crop in China, the largest producer, has deteriorated compared with a year earlier after low temperatures and prolonged rains delayed planting and plant development, the official Xinhua News Agency said on Sept. 11.

“We knew coming into the year that we hardly had any room for error or any crop problems around the globe as demand had been continuing to grow coming out of the recession,” said Hibbie Barrier, a director at Avondale Futures Group in Nashville, Tennessee. “There’s enough uncertainty to keep prices supported.”

Cotton futures for December delivery rose 1.79 cents, or 1.9 percent, to settle at 94.5 cents a pound at 2:41 p.m. on ICE Futures U.S. in New York. Earlier, the price reached 94.85 cents, the highest level for a most-active contract since June 19, 1995.

Global inventories will fall to 45.4 million bales in the 12 months ending July 31, the lowest level in 14 years, U.S. Department of Agriculture data showed on Sept. 10.

“This last leg of the rally has a lot to do with the trade’s inability to sell the market without any physical on hand,” said Louis Barbera of VIP Commodities, a trading company in New York. “The trade cannot sell with any conviction because of this supply tightness.”

The fiber has gained 25 percent this year. The U.S. is the biggest exporter.

The price may jump to $1.25 by January because of limited supplies worldwide, O.A. Cleveland, a professor emeritus in agricultural economics at Mississippi State University, said today on a conference call run by Ag Market Network.

Orange-juice futures for November delivery rose 0.45 cent, or 0.3 percent, to settle at $1.465 a pound in New York. Earlier, the price reached $1.4725, the highest level since Aug. 4. The commodity has advanced 14 percent this year.

To contact the reporters on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net; Elizabeth Campbell in Chicago at ecampbell14@bloomberg.net;

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.