World cotton prices will ease and stay in a narrow range after China, the world's biggest consumer, finished filling its state reserves, while a lack of exports from second biggest producer India helps prop up prices, industry experts said.
The major factor that could drag down prices was the end of China's purchases for its state reserves, Terry Townsend, executive director of the International Cotton Advisory Committee (ICAC), told Reuters. "Nobody knows for sure, but I think cotton futures prices could drop by 20 to 30 cents per pound in 2012/13," added Townsend, who was speaking on Thursday at an industry conference in Thailand.
China completed its domestic stockpiling plan by March 31, after buying 3.13 million tonnes of cotton for state reserves, accounting for nearly half the country's 2011 harvest. July cotton on the ICE Futures US exchange fell 0.66 cent to close at 90.80 cents per lb on Wednesday. It had ended the first quarter up nearly 3 percent. US cotton futures struck a record above $2.20 a pound in March last year as investors bet on the fibre, partly led by strong demand from China and limited supply from India after rains hit the harvest.
Comments
Comments are closed.