Cotton Slumps on India Export Plan; Orange Juice Sinks

Cotton futures fell the most in three weeks on signs that supplies will increase as India, the world’s second-biggest producer, resumes exports of the fiber. Orange juice also sank.

India will suspend a ban on shipments after protests from traders and on a forecast that the harvest may top estimates, Commerce Minister Anand Sharma said. On March 5, the country barred exports to secure domestic supplies after sales abroad surged above a government surplus estimate. Through April 19, the U.S. exported 3.97 million bales of upland cotton to China in the season that began Aug. 1, 18 percent more than a year earlier, according to the U.S. Department of Agriculture.

“This announcement by India will help to ease fears of a nearby supply squeeze brought about by Chinese hoarding,” Peter Egli, a Chicago-based director of risk management at Plexus Cotton Ltd., said in an e-mail.

Cotton for July delivery slid 2 percent to settle at 89.4 cents a pound at 2:33 p.m. on ICE Futures U.S. in New York, the biggest decline for a most-active contract since April 4. Earlier, the commodity reached 87.87 cents, the lowest since April 17. This month, the price retreated 4.4 percent, the most since November.

Stockpiles of certified cotton at warehouses monitored by ICE climbed 44 percent to 135,811 running bales as of April 27 from the end of March, exchange data show.

India’s decision “will probably put some pressure” on the July contract, especially with bigger inventories, Egli said.

The U.S. is the world’s biggest shipper and China is the largest user and grower of cotton. A running bale weighs 500 pounds, or 227 kilograms.

Orange-juice futures for July delivery declined 4.2 percent to $1.4185 a pound on ICE. The beverage plunged 14 percent in April, the third monthly loss and the longest slide since the end of 2008.

U.S. retail sales of the beverage fell 11 percent to 39.05 million gallons in the four weeks ended April 14 from a year earlier, the Florida Department of Citrus said today in a report, citing Nielsen Co. data.

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