ICE cotton futures plunged to their lowest level in more than 10 years on Thursday, on fears of dwindling demand for the natural fiber due to the coronavirus and its impact on supply chains.

Cotton contracts for May settled down 1.71 cent, or 3.02%, at 54.93 cents per lb.

Earlier in the session, the contract traded limit down and hit its lowest since June 2009 at 53.64 cents.

“Cotton being a luxurious commodity, demand is not good given the coronavirus situation," said John Bondurant, a trader in Memphis, Tennessee, noting that the shutdown of two terminals at Port Houston, Texas, added to concerns about cotton shipments.

Disruptions at Port Houston could have serious implications on shipping of the natural fiber from Texas, the biggest cotton growing region in the United States.

Port Houston said its Bayport and Barbours Cut container terminals have been closed and operations temporarily suspended after a person who worked at both sites tested positive for the coronavirus.

The coronavirus pandemic has killed more than 9,000 people globally, infected more than 234,000 and prompted widespread emergency lockdowns, fuelling fears of a global economic slowdown.

Data from the United States Department of Agriculture (USDA) showed net sales of 340,700 running bales for the week ended March 12, down 30% from the previous week, but up 3% from the prior 4-week average.

“Export sales have come better than what the investors were expecting," Bondurant said.

Further weighing on cotton prices, the dollar soared to its highest since 2017, rising against a basket of currencies for a third day. Certificated cotton stocks deliverable as of March 18 totaled 41,580 480-lb bales, unchanged from 41,580 in the previous session.