Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Cotton Declines From Record as Global Production Poised to Jump

March 8 (Bloomberg) -- Cotton fell from an all-time high, halting the longest rally in more than a year, on speculation that rising production will help ease a supply shortage.

Global output will jump 11 percent to a record 27.6 million metric tons in the year starting Aug. 1 after prices surged, the International Cotton Advisory Committee said on March 1. China, the world’s largest producer and consumer, aims to boost its crop by 14 percent, according to a government report last week.

“We’ve got quite a bit more cotton coming in the future,” said Sid Love, the president of Joe Kropf & Sid Love Consulting Services LLC in Overland Park, Kansas.

Cotton for May delivery dropped by the exchange limit of 7 cents, or 3.3 percent, to settle at $2.0714 a pound at 2:54 p.m. on ICE Futures U.S. in New York. Before today, the price rose for seven straight days, jumping 21 percent in the longest string of gains since September 2009. The commodity reached a record $2.197 yesterday.

The fiber has more than doubled in the past year as surging demand outstripped global supplies.

Cotton’s 14-day relative-strength index was above 70 on March 4 and March 7, a signal to some investors that prices were poised to fall.

“It’s a correction as the price went up too much and too fast,” said Toshimitsu Kawanabe, an analyst at commodity broker Central Shoji Co. “There’s little change in fundamentals; supply is scarce this season.”

To contact the reporters on this story: Chris Prentice in New York at cprentice3@bloomberg.net; Jae Hur in Tokyo at jhur1@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.