Cotton Falls From Record as Cotlook Forecasts Global Supply to Top DemandBy Luzi Ann Javier and Debarati Roy
Cotton futures fell from a record on speculation that the
global crop will increase, replenishing a deficit that led prices double in the past five months.
Production will exceed demand by 1.2 million metric tons in the season
starting Aug. 1, making up for about a third of the shortfall in the past two years, Cotlook Ltd., an industry researcher, said yesterday.
Earlier, cotton jumped the most allowed by ICE Futures U.S. to a record $2.0893 a pound and then
tumbled by the limit. Prices
may “wane over the balance of 2011 as global production rebounds and inventories begin to rebuild,†Luke Mathews, a strategist at Commonwealth Bank of Australia, said in a report.
“The market was going crazy because of
short-covering by mills,†said Ron Lawson, a managing director at Logic Advisors, a commodity consultant in Sonoma, California. “We will see a
temporary pullback, but the demand story remains intact.â€
World output will
gain 13 percent to a record 27.65 million tons, more than the projected 4.4 percent increase in consumption Birkenhead, England-based Cotlook said yesterday in its first estimates for the new season.
In China, the world’s biggest producer and consumer,
output will increase 15 percent, the company said.
http://www.bloomberg.com/news/2011-02-1 ... emand.html
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