Analysis Says Supply And Demand Or Lead To Further Decline In Cotton Prices

On the morning of December 2nd, analysts said that record cotton production and consumption in the downturn would be cotton Inventories have been pushed up to their highest level since 2005, thus further pushing down the price of cotton futures, which is the worst performing this year. commodity 。

According to the US Department of Agriculture Estimate In the 12 months to July next year, cotton production will increase by 7.5% to 123 million 890 thousand packages (480 pounds per pack, 123 million 900 thousand packets equivalent to 27 million tons), while demand will drop to 114 million 270 thousand packages (25 million tons), the lowest level in three years.

According to a Bloomberg survey, 12 analysts surveyed expect an end to the end of next year, ICE Futures U.S, New York ICE. Cotton futures prices may fall by 15%, from 90.01 cents a pound (or 1.98 dollars per kilogram) to 77 cents a pound (about 1.70 dollars per kilogram). According to data released by the US Commodity Futures Trading Commission (CFTC), speculators in the US futures market have seen their cotton futures bullish at its lowest level in two and a half years.

"It's a double blow," said James Daly, James manager of asset management at TEAM Financial Management, Pennsylvania financial management company. Cotton is facing the worst nightmare of commodity futures, that is, the actual production process coupled with weak demand performance.

Since hitting a record high of US $2.197 per pound (US $4.84 per kilogram) in March this year, cotton futures prices have fallen by 58%, as investors speculate that prices will then lead to demand constraints and supply growth. The output of cotton from Australia, China and India not only offset the decline in US production, but also exceeded it. The decline in cotton production in the United States is due to the worst crop weather since the dust storm in 1930s.

According to the IMF's expectation, the economic growth rate from Europe to China and the Middle East will slow down next year, which may limit the consumption of commodities. Clothing manufacturers including Levy Strauss (Levi Strauss) have begun to cut prices to stimulate demand growth. In this year's trading, cotton futures prices have fallen by 36%, the worst performance in the 24 commodity futures tracked by Standard & Poor s GSCI, which rose 4% in the same period.