Blog: Record inventories weigh on cotton prices
Leonie Barrie | 14 May 2012
International cotton prices for July delivery fell to a low of 77.16 cents a pound last week after a US government report forecast record inventories for the second season in a row. While prices subsequently rebounded, they are still sitting at around one-third of the cotton price peak reached in March last year.
Data from the US Department of Agriculture (USDA) suggested ending stocks would rise 10% to 73.75m bales in the 2012/13 season, which begins on 1 August.
Inter-governmental group the International Cotton Advisory Council (ICAC) also said the projected accumulation of cotton stocks in China will weigh on international cotton prices in 2012/13 - but the extent of this downward pressure will largely depend on how the Chinese national reserve is handled.
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