Cotton prices rose, extending a rally above $2 a pound, on signs that global supplies will remain limited this year amid increased demand from China, the world’s biggest consumer. Orange juice also gained.
Imports by China in January jumped 31 percent from a year earlier after an 86 percent surge in 2010, government data show. The price in New York more than doubled in the past 12 months, reaching a record of $2.0893 on Feb. 18. The fiber jumped by the exchange limit on ICE Futures U.S. for the fourth straight day after dropping by the maximum in the previous four sessions.
“China seems to be still actively buying cotton,” said Sid Love, the president of Joe Kropf & Sid Love Consulting Services LLC in Overland Park, Kansas. “This is a wild market that none of us have ever witnessed.”
Cotton for May delivery rose by the limit of 7 cents, or 3.6 percent, to settle at $2.006 at 2:55 p.m. on ICE in New York. The price has jumped 13 percent since Feb. 24.
China’s output declined 6.3 percent last year. Inventories in the U.S., the biggest exporter, have tumbled 68 percent in the past year, ICE data show.
“Supplies are still extremely tight, and buyers have been facing difficulty in securing raw cotton this season,” said Han Sung Min, a broker at Korea Exchange Bank Futures Co. in Seoul.
Global cotton production will rise 11 percent to a record in the year starting Aug. 1 after prices surged, the International Cotton Advisory Committee said yesterday.
“We will definitely see an increase in acreage, especially in the U.S., and that should help prices come down,” Love of Joe Kropf & Sid Love Consulting said.
Orange-juice futures for May delivery gained 1.05 cents, or 0.6 percent, to $1.763 in New York. The price has climbed 18 percent in the past 12 months.