Cotton futures in New York jumped to a record as growers struggled to meet surging demand from China, the world’s biggest consumer.
Prices have more than doubled in the past year as China’s imports climbed to the highest level since 2006 and adverse weather slashed global crops. Hennes & Mauritz AB, Europe’s second-largest clothing retailer, today reported a steeper drop in fourth-quarter profit than analysts estimated partly as the rising cotton costs eroded margins.
“The underlying support comes from Chinese demand,” Andy Ryan, a senior risk-management consultant at FCStone Fibers & Textiles in Nashville, Tennessee, said in a report. “There is some short-covering by textile mills.”
Cotton for March delivery climbed 2.56 cents, or 1.5 percent, to settle at $1.6939 a pound on ICE Future U.S. at 2:58 p.m. in New York. Earlier, prices jumped by the 6-cent exchange limit to a record $1.7283 a pound.
China’s imports totaled 2.84 million metric tons last year, according to customs data. That’s the most since 2006, when purchases were a record 3.47 million tons, Bloomberg data show.
A delegation of Chinese buyers signed agreements on Jan. 21 to buy commodities including soybeans and cotton from Cargill Inc., Louis Dreyfus Corp. and Allenberg Cotton Co. during the U.S.-China Trade and Economic Cooperation Forum. The U.S. is the biggest shipper of the fiber.