ICE cotton futures declined as much as 2% on Thursday as lingering concerns over the impact of the coronavirus epidemic on China's economy weighed on the natural fiber. Cotton contracts for March fell 1.31 cent, or 1.87%, at 68.75 cents per lb by 1:12 p.m. EST (1812 GMT). It traded within a range of 68.54 and 70.06 cents a lb.
"We are seeing a sell-off due to the coronavirus scare" said Keith Brown, principal at cotton brokers Keith Brown and Co in Moultrie, Georgia. "If the virus spreads enough in China they may shut down ports and you can't bring cotton in."
Infections from China's coronavirus spread to more than 8,100 people globally on Thursday, surpassing the 2002-2003 SARS epidemic's total fuelling fears that it will pummel the world's second-largest economy. Adding to the uncertainty, the International Monetary Fund said on Thursday it is closely monitoring the outbreak, but it is too soon to quantify the potential economic impact of the virus.
The United States is one of the world's biggest producers of the natural fiber, while China is the largest consumer. The US Department of Agriculture report showed net sales hit a marketing year high of 347,100 running bales for 2019/20, up 13% from the previous week and 48% from the prior 4-week average.
Total futures market volume fell by 1,938 to 21,286 lots. Data showed total open interest gained 1,912 to 267,505 contracts in the previous session. Certificated cotton stocks deliverable as of 29 Jan. totaled 6,792 480-lb bales, unchanged from 6,792 in the previous session.
Comments
Comments are closed.