(Dec 22): Cotton futures plunged after data showed Chinese buyers of US cotton made the largest purchase cancellation in a decade in fresh signs of demand headwinds for the world’s biggest exporter.
China nixed 144,400 bales of purchases for the week ended Dec 15, according to the US Department of Agriculture, the biggest weekly cancellation since June 2012. That pulled down overall American sales. China’s demand has slowed due to Covid-19 lockdowns and a contraction in manufacturing. The Asian nation is the world’s biggest importer of the fiber and the biggest US customer.
Cotton futures tumbled as much as 4.5% to 84.35 cents a pound on ICE Futures US, on pace for the biggest loss since Nov 21. The price has plunged more than 45% since reaching a decade high in May amid mounting demand worries.
The USDA has slashed its outlook for world consumption in recent months, citing high inventories, slowing economies amid high rates that leave mills operating below capacity in key textile and apparel exporters such as Bangladesh and India.
International sanctions against cotton produced in the region of Xinjiang, by far China’s largest producing province, are also keeping more of the fiber at home, reducing Chinese imports of yarn.
Πηγή: theedgemarkets.com