February 22, 2013
China demand causes rise in cotton prices
China's growing cotton demand is helping to improve the international market for the commodity and driving a rally in cotton prices.
Cotton plantings are forecast to fall to the lowest level since 1983, down 27% from 2012, according to estimates from the National Cotton Council, an industry group.
Prices have risen 17% since August 1, the start of the new marketing year, and are near a seven-month high. Cotton for March delivery rose 0.25%.
For much of past year, China snapped up cotton for its strategic stockpiles, which are forecast to be at a record level at the end of the current marketing year on July 31. With the country's warehouses brimming with cotton, many investors believed the country's mills would turn to these stockpiles for their needs.
However, mills are importing from the US since they can get better-quality cotton abroad for about the same price.