NEW YORK: On Friday, ICE cotton futures were on their way to their biggest annual rise in 11 years, boosted by robust demand for natural fiber and tight supply due to the global shipping crisis.
Cotton prices have increased by more than 44% this year, their biggest annual percentage gain since 2010.
âThe biggest factors that have pushed prices up this year have been tight supplies due to shipping issues, robust demand, and several funds being pumped back into the commodities market,â said Bailey Thomen, Managing Partner. risks of cotton at StoneX Group.
China is one of the main consumers of American cotton.
For the current session, the March 1 cotton contract on ICE Futures fell 1.87 cents, or 1.6%, to 112.47 cents per pound, as of 12:34 p.m. EST (1734 GMT). âThe downward movement today is a setback after the big moves this week,â said Jim Nunn, owner of Tennessee-based cotton brokerage Nunn Cotton.
On Thursday, prices hit 115.33 cents, their highest level since November 30.
Meanwhile, the US Department of Agriculture’s (USDA) weekly export sales report on Thursday reported net sales of 192,200 current bales, down 21% from the previous week and from 40% compared to the average of the previous 4 weeks, with China being the first to buy.
Export sales were primarily to the usual suspects, while the pace of shipments continues to cause concern, Louis Rose of Tennessee-based Rose Commodity Group said in a note dated Thursday.
The total volume of the futures market fell from 9,271 to 9,023 lots. The data showed that total open interest gained 1,969 to 239,578 contracts in the previous session.