Tags: Cotton Tops 2 for First Time in New York as Bulls Go ‘Berserk’

Cotton Tops $2 for First Time in New York as Bulls Go ‘Berserk’

Thursday, 17 Feb 2011 02:35 PM

Cotton topped $2 a pound in New York for the first time ever as accelerating global growth boosted demand for garments manufactured in China, the world’s biggest consumer and importer, amid shrinking global supplies.

China’s apparel exports in January surged 34 percent from a year earlier to $13.38 billion, the Customs Bureau said this week. Stockpiles monitored by ICE Futures U.S. have plunged 84 percent since June 1. Flooding in Australia and Pakistan and drought in Russia and other parts of Europe have reduced output.

Textile mills are buying more fiber as the global economy recovered from the worst recession since World War II. Costs may rise for U.S. retailers including Gap Inc., J.C. Penney Co. because cotton has more than doubled in the past 12 months. Olah Inc., a U.S. apparel manufacturer that supplies Gap, said it raised prices for “several products.”

“The bulls have gone berserk, and it looks like they want prices to go higher,” said Sid Love, the president of Joe Kropf & Sid Love Consulting Services LLC in Overland Park, Kansas. “China’s demand still remains strong.”

Cotton for May delivery rose by the exchange limit of 7 cents, or 3.6 percent, to a record $2.0193 a pound on ICE Futures at 10:35 a.m. in New York. Before today, prices were up 35 percent in 2011, the most of any of the 19 commodities in the Reuters/Jefferies CRB Index.

Draining Stockpiles

For the year that began Aug. 1, China will consume 47 million bales, exceeding domestic output estimated at 30 million bales, the U.S. Department of Agriculture said on Feb. 9. The deficit may help drain global stockpiles to 42.8 million bales, the smallest since 1996, according to the USDA.

“The recent momentum has been undeniably bullish,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia said by phone from Sydney. “Considering that we have hit this $2 mark, which is where many people are suggesting the near-term target in the market was, where do we go from here? It’s really an uncertain environment.”

September-delivery cotton traded on the Zhengzhou Commodity Exchange climbed 3.5 percent to an all-time high of 34,870 yuan ($5,297) a metric ton.

© Copyright 2017 Bloomberg News. All rights reserved.

 
1Like our page
2Share
StreetTalk
Cotton topped $2 a pound in New York for the first time ever as accelerating global growth boosted demand for garments manufactured in China, the world s biggest consumer and importer, amid shrinking global supplies.China s apparel exports in January surged 34 percent from...
Cotton Tops 2 for First Time in New York as Bulls Go ‘Berserk’
361
2011-35-17
Thursday, 17 Feb 2011 02:35 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved