By Julie Wernau
Cotton prices dropped sharply Thursday despite an increase in weekly sales of the fiber as weak economic data fueled ideas of slumping global demand.
Cotton for March delivery fell 2.8% to 60.23 cents a pound on the ICE Futures U.S. exchange, the lowest close for the most active contract since Oct. 2 and its steepest percentage drop since Sept. 18.
"There's so many economic indicators getting at that question -- what is going to drive up demand for apparel? Big picture, I just don't see a booming economy," said John Robinson, cotton marketing economist at Texas A&M University in College Station, Texas.
Stubbornly weak oil prices have lowered prices for petroleum-based synthetic fibers, cutting demand for cotton, and recent economic data out of the U.S. has disappointed.
Sales of U.S. upland cotton rose 96% week-over-week to 251,600 bales and exports reached a marketing-year high of 233,500 bales but are still behind the pace needed to meet USDA expectations for the year.
Mr. Robinson said exports have been tracking cotton prices, with demand ticking up when cotton is between 61 cents and 63 cents a pound but dropping at higher prices.
In other markets, arabica coffee for March rose 1.4% to end at $1.232 a pound, March cocoa fell 2.6% to end at $2,764 a ton, raw-sugar futures ended flat at 12.89 cents a pound and frozen concentrated orange juice futures rose 0.7% to $ 1.3665 a pound.