Cotton futures jumped to the highest since October on signs that demand is improving in China, the world’s biggest consumer and importer.
To satisfy domestic mill demand, the government began selling from state reserves this week, the China National Cotton Exchange said yesterday. Imports rose 75 percent in December from a month earlier, another report showed. The U.S. Department of Agriculture on Jan. 11 boosted its forecast of Chinese imports this year by 8.7 percent to 12.5 million bales. Prices fell 18 percent in 2012 on signs of ample supply.
“They are going to need to import more cotton over the next six weeks” to replenish stockpiles, Chris Kramedjian, a fibers and textiles consultant at INTL FCStone LLC, said in a telephone interview from Nashville, Tennessee.
Cotton for March delivery rallied 1.5 percent to 77.39 cents a pound at 12:08 p.m. on ICE Futures U.S. in New York, after touching 77.78 cents, the highest for a most active contract since Oct. 19.
On Jan. 11, the USDA cut its estimate for domestic production in the year ending July 31, reduced the outlook for stockpiles and boosted its projection for shipments. The U.S. is the world’s largest exporter.
A bale of cotton weighs 480 pounds, or 218 kilograms.
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