Supply And Demand Or Cotton Prices Further Fall

Beijing time on the morning of December 2nd, analysts said, a record. cotton Output and falling consumption will push cotton inventories up to their highest level since 2005, further pushing cotton futures prices down, which is the worst performing commodity this year.

According to estimates from the US Department of agriculture, cotton production will increase by 7.5% to 123 million 890 thousand packs (480 pounds per pack, 123 million 900 thousand packets equivalent to 27 million tons) in the 12 months ending July next year, while the demand will drop to 114 million 270 thousand packages (25 million tons), the lowest level in three years.

According to a Bloomberg survey, 12 analysts surveyed expect an end to the end of next year, ICE Futures U.S, New York ICE. Cotton futures prices may fall by 15%, from 90.01 cents a pound (or 1.98 dollars per kilogram) to 77 cents a pound (about 1.70 dollars per kilogram). According to data released by the US Commodity Futures Trading Commission (CFTC), speculators in the US futures market have seen their cotton futures bullish at its lowest level in two and a half years.

"It's a double blow," said James Daly, James manager of asset management at TEAM Financial Management, Pennsylvania financial management company. Cotton is facing the right thing. commodity The worst nightmare of futures is the actual production process coupled with weak demand performance.

Since hitting a record high of US $2.197 a pound (about $4.84 per kilogram) in March this year, cotton has reached a record high. futures The price has fallen by 58% because investors speculated that the price at that time would limit demand and increase supply. The output of cotton from Australia, China and India not only offset the decline in US production, but also exceeded it. The decline in cotton production in the United States is due to the worst crop weather since the dust storm in 1930s.

According to the IMF's expectation, the economic growth rate from Europe to China and the Middle East will slow down next year, which may limit the consumption of commodities. Clothing manufacturers including Levy Strauss (Levi Strauss) have begun to cut prices to stimulate demand growth. In this year's trading, cotton futures prices have fallen by 36%, the worst performance in the 24 commodity futures tracked by Standard & Poor s GSCI, which rose 4% in the same period.