May 23 (Bloomberg) -- Cotton futures fell to the lowest in almost three months on concern that a slowing economy will curb demand in China, the worldΆs biggest importer.
A preliminary reading of a Purchasing ManagersΆ Index released today by HSBC Holdings Plc and Markit Economics showed that Chinese manufacturing is contracting in May for the first time in seven months, adding to signs that the economy is losing steam for the second straight quarter. In the year starting Aug. 1, the countryΆs imports of cotton may drop 34 percent as inventories swell, the U.S. government estimates.
“Supply and demand fundamentals are looking increasingly bearish across the short and medium term,” analysts at Rabobank International, led by Luke Chandler, said in a report.
Cotton for July delivery tumbled 2 percent to settle at 81.78 cents a pound at 2:30 p.m. on ICE Futures U.S. in New York. Earlier, the price touched 81.52 cents, the lowest for a most-active contract since Feb. 26. Trading was 24 percent above the average for this time of day in the past 100 days, according to data compiled by Bloomberg.