Marvin G. Perez
(Bloomberg) -- The outlook for cotton production in Texas, the nation’s largest producer, took a turn for the worse in a fresh blow to global supplies of the fiber.
Only 11% of Texas crops were rated good-to-excellent in the week to Aug. 21, down from 14% a week earlier, matching the lowest since 2011, Department of Agriculture data showed. The portion of plants in poor-to-very poor conditions increased to 59% from 50% a week earlier.
Texas accounts for more than half of US output. The worsening supply prospects for the US, a top shipper, is fueling a third consecutive year of global deficits for the fiber, according to the USDA. There are also crop issues from Brazil to Australia, all threatening to boost the cost outlook for clothing companies such as Levi Strauss & Co. and Hanesbrands Inc.
The World’s Cotton Supply Keeps Shrinking, Hit by Drought, Heat
The ratings “are horrible” and “rival the worst of the worst,” said Jarral Neeper, president of TruCott Inc., a broker in California.
This month, the Department of Agriculture cut its projection for the domestic 2022-23 harvest by 19% to the lowest since 2009-10, helping fuel a 21% surge in cotton futures in New York so far in August.