Cotton at 11-month high on China import speculation

The cotton price reached 93.93 cents, the highest for a most- active contract since March 30, 2012. This week, the commodity soared 6.5%, the most in five months

Cotton futures jumped to the highest in 11 months on speculation that China, the world's biggest consumer, will increase imports.

The US Department of Agriculture (USDA) last week raised its estimate for Chinese consumption this year to 36 million bales, up by 1.4 per cent from a month earlier. The USDA also boosted its forecast for the Asian nation's imports by 7.1 per cent. The Chinese government may boost import quotas by April, Reuters reported.

“Talk continues of additional Chinese cotton-import quotas being issued,” Sharon Johnson, a senior market specialist at Knight Futures in Roswell, Georgia, said in a report.

Cotton for May delivery advanced 1.8 per cent to settle at 92.5 cents a pound at 2:30 pm on ICE Futures US in New York. Earlier, the price reached 93.93 cents, the highest for a most- active contract since March 30, 2012. This week, the commodity soared 6.5 per cent, the most in five months.

This year, the fiber has surged 23 per cent, the most among 24 raw materials in the Standard & Poor’s GSCI Spot Index. The cotton increase today led gains in the commodity gauge.

In the week ended March 7, US exports of upland cotton rose 25 per cent from a week earlier with demand increasing in Turkey, Indonesia and China, the USDA said yesterday.

“Anticipation of, and then confirmation of, continued strong interest in US cotton” boosted prices, Johnson said.