NEW YORK—Cotton traded at its lowest price in more than five years on Tuesday as Chinese data and revised global forecasts fueled concerns over demand for apparel and products made with the fiber.
China’s economy grew 7.4% last year, the slowest growth rate in nearly a quarter of a century, the National Bureau of Statistics said Tuesday. China is the world’s largest cotton importer.
In addition, the International Monetary Fund reduced its 2015 global growth forecast to 3.5%, from 3.8% previously. The revision follows a similar move by the World Bank, which last week cut its forecast for global economic expansion by 0.4 percentage point to 3%.
A global slowdown could limit demand for cotton-based products, analysts have said.
If “consumer spending is not doing well, one of the first things people skimp on is not the car payments or house payments but a new pair of shoes or new jeans,” said Gary Raines, chief fiber and textile economist at INTL FCStone in Nashville, Tenn.
The most actively traded cotton contract on the ICE Futures U.S. exchange, for March, shed 2.4% to end at 57.79 cents a pound. It was the lowest settlement since Aug. 27, 2009.
In other markets, sugar futures surged to a nearly two-month high, bucking the trend among other soft-commodity markets, after the government in top grower Brazil raised taxes on gasoline.
The move, announced Monday, will likely mean higher prices at the pump for Brazilian drivers, who may then opt to buy more ethanol. Higher demand for ethanol could mean processors use more of their cane to make the biofuel, thereby limiting sugar production, analysts said.
Brazil will raise a tax on gasoline and diesel on Feb. 1 and increase a different tax on fuels after 90 days. Finance Minister Joaquim Levy said the higher taxes are part of a package intended to generate 20.6 billion reais ($7.9 billion) in government revenue this year.
Raw sugar for March rose 3.3% to 15.83 cents a pound, the highest settlement for the most active contract since Nov. 26.
Arabica-coffee futures tumbled 3.9% to $1.6430 a pound, the lowest since Jan. 2, as forecasts for rain in Brazil’s main growing areas helped ease worries of another drought-hit crop from the world’s top producer and exporter of the beans. It was the largest one-day percentage loss for the most actively traded arabica-coffee contract since Nov. 20.
Arabica is a type of coffee prized for its mild flavor and frequently used in gourmet blends.
Cocoa futures fell for the third consecutive session, with the March contract easing 0.6% to $2,925 a ton.
Orange juice for March ended unchanged at $1.4650 a pound.