Cotton Extends Longest Slump Since July as Debt Woes Erode Demand Outlook
Cotton futures fell for the fifth straight session, heading for the longest slump since July, on signs that slowing economic growth will curb demand for supplies from the U.S., the world’s largest exporter.
The debt crisis in Europe and political squabbling over how to prevent contagion are raising concern that the risk of defaults by governments is increasing, the International Monetary Fund said today. The MSCI World Index of equities fell as much as 1 percent. Before today, cotton futures plunged 52 percent from a record in March.
“A lot of people are worried about demand destruction” as the economic crisis worsens in Europe, Fain Shaffer, the president of Infinity Trading Corp., in Medford, Oregon, said in a telephone interview. “There won’t be as much need for as much cotton.”
Cotton for December delivery slumped 1.71 cents, or 1.6 percent, to $1.037 a pound at 11:16 a.m. on ICE Futures U.S. in New York. A close at that level would cap the longest losing streak since July 6. Before today, the price was down 27 percent this year. Prices reached a record $2.197 on March 7.
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