According to reports, cotton farmers in US will probably cut down acreage to the lowest since 2009 after prices slumped in January to a five-year low.
Plantings is predicted to drop to 9.73 million acres in the season beginning 1 August, from 11.04 million a year earlier, as farmers will switch to other crops including peanuts. The National Cotton Council is set to release its planting-intentions survey on 7 February.
Farmers in India and China are also slated to cut acreage, reducing thus the next global harvest by more than 6 per cent to 24.6 million tonnes, the lowest in six years, the International Cotton Advisory Committee said early this month. Output will trail consumption by about 100,000 tonnes, the ICAC said.
However, this level of deficit will not significantly reduce world stock but supplies of high-quality US cotton will tighten, pushing up prices for fiber delivered in December, reports said. The December contract on ICE Futures US in New York is projected to rise to US cents 70 a pound in the next two months, from as low as US cents 62.72 on 3 February.
According to the US department of agriculture, US sold 8.978 million bales of this seasonâ€™s upland cotton crop, 830,200 bales more than a last year. Drawing down these stocks at the current rate that US is exporting, prices will move up to get cotton planted said an expert on the subject.
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