Cotton futures advanced to a one- week high in New York on mounting concern that India, the world’s second-biggest grower, may not ship more fiber.
India will decide by Dec. 3 if it should ease a limit on cotton exports, Farm Minister Sharad Pawar told reporters in New Delhi today. The nation said in September that it would restrict shipments to 5.5 million bales in a bid to meet domestic demand. Before today, cotton surged 53 percent this year on speculation that global use would outpace dwindling supplies.
“You’re dealing with governments, and they tend to change the rules,” said Sid Love, the president of Joe Kropf & Sid Love Consulting Services LLC in Overland Park, Kansas. “If they decide they want to sell it, they’ll sell it. They can also decide that they don’t want to right now.”
Cotton for March delivery rose 1.66 cents, or 1.4 percent, to $1.1742 a pound at 10:17 a.m. on ICE Futures U.S. in New York. Earlier, the fiber touched $1.189, the highest since Nov. 22.
Before today, prices slumped 7.6 percent in November, heading for the biggest monthly decline since January. Futures fell as China acted to cool its economy, spurring speculation that commodity demand will decline.
In September, India’s Pawar said he was opposed to export limits and that growers should get the “higher prices” exports may bring. A bale in India weighs 170 kilograms, or 375 pounds.
U.S. Supplies
Yesterday, U.S. stockpiles held in ICE warehouses rose 12 percent to 92,747 bales. Still, inventories are down 91 percent from the 2010 high in June. A U.S. bale weighs 480 pounds, or 218 kilograms.
Stockpiles “are going to be tight all year,” said Rogers Varner, the president of brokerage Varner Bros. in Cleveland, Mississippi. “We just don’t have any cotton left we can sell.”
In the U.S., 91 percent of the crop was harvested for the week ending Nov. 28, up from 80 percent last year, the Department of Agriculture said yesterday.