Cotton may remain under pressure in the short term after prices tumbled in the past month, Australia & New Zealand Banking Group Ltd. said.
The crop in Australia, the world’s third-biggest cotton exporter, may be as much as 20 percent larger than last year, ANZ analyst Paul Deane wrote in an e-mailed report today. Cotton is the worst-performing commodity this month on the Standard & Poor’s GSCI Index of 24 raw materials. The most-active contract has plunged 19 percent since April 30 on rising global supplies.
“Short term, prices look set to remain under pressure,” Deane wrote. “Raw cotton stocks in bonded warehouses in China are high and large export programs out of Australia and Brazil will be apparent over the next six months.”
The U.S. and Brazil are the world’s biggest cotton shippers, according to the U.S. Department of Agriculture.