Aug 2 (Reuters) - ICE cotton futures fell over 4% in heavy volumes on Friday to its lowest in more than three years on worries over the worsening trade war between the United States and China, with the natural fiber already facing demand woes.
* The most-active cotton contract on ICE Futures U.S., the
second-month December contract , fell 2.65 cent, or
4.25 %, to 59.72 cents per lb as of 12:32 p.m. EDT (1632 GMT).
* The contract touched its lowest since April 2016 at 59.43 cents a lb earlier in the session.
* U.S. President Donald Trump said on Thursday he would slap an extra 10% tariff on $300 billion worth of Chinese imports and would raise it further if trade talks do not progress.
* “The markets have been collapsing since yesterday after the president announced tariffs. We are in real trouble. The cotton, unfortunately, just does not have a magical price. Right now the
consumer textile market is in peril, ” said Ed Jernigan, chief
executive of Jernigan Global, a cotton textile supply chain manager.
* “The Chinese textile industry is collapsing. They cannot get the orders. Right now the cotton supply chain is not going to return to what it was.”
* The natural fiber has slid over 6% since Thursday and by about 19% so far this year owing to a drawn-out trade war between cotton’s top consumer, China, and one of the top producers, the United States.
* “With an escalating trade war looming, with global cotton production trending towards 127 million bales, with global demand cooling and with the technical picture rolling over, the market is currently facing a lot of headwinds and the path of least resistance continues to be down for now,” British merchant Plexus Cotton said in a research note.
* Total futures market volume rose by 7,597 to 30,630 lots. Data showed total open interest gained 1,981 to 198,368 contracts in the previous session.
* Certificated cotton stocks <CERT-COT-STX> deliverable as of August 1, totaled 28,823 480-lb bales, down from 30,437 in the previous session.
(Reporting by Nallur Sethuraman in Bengaluru; editing by Grant McCool)
Source: Reuters