Cotton rises as demand gains amid a halt in exports by India
Sunday, 25 April 2010
NEW DELHI, April 23 (Bloomberg): Cotton rose, posting the biggest weekly gain in two months, on signs of increasing demand amid a halt in exports by India, the world's second-largest shipper. Orange juice also gained.
US durable-goods orders, excluding transportation, jumped in March by the most since December 2007, adding to evidence the economic recovery is strengthening. The Cotton Association of India said the nation's export ban may affect as many as 2.5 million bales. Futures reached to a two-year high of 86.8 cents a pound on April 21.
"The improving macroeconomic situation and India's decision not to export any cotton" drove prices higher, said Robin Rosenberg, a futures strategist at PFG Best Research, a brokerage in Chicago.
Cotton for July delivery rose 1.38 cents, or 1.6 per cent, to 86.2 cents a pound on ICE Futures US in New York. This week, the price climbed 5.7 per cent, the most since mid- February.
India's cotton output will rise to a record 25 million bales in the year starting Aug. 1 from an estimated 23.5 million a year earlier, a US Department of Agriculture unit said on April 15.
"Extremely high US exports" are also boosting prices, Rosenberg said. The country is the top shipper.
Sales of upland cotton to overseas buyers in the week ended April 15 jumped 24 per cent to 347,100 running bales from a week earlier, the USDA said yesterday. Futures have climbed 65 per cent in the past year as global output dropped and demand rebounded.
Orange-juice futures for July delivery rose 1 cent, or 0.7 per cent, to $1.3695 a pound. This week, the price climbed 3.2 per cent, the most since early March. The commodity has advanced 62 per cent in the past year.
Meanwhile: A ban on cotton shipments from India, the world's second-largest grower and exporter, may affect as many as 2.5 million bales of the commodity, an industry group said.
The amount is for the commodity registered for export yet unshipped when the restriction was announced April 19, the Cotton Association of India said in an e-mailed statement, adding that it was "shocked" by the prohibition. The group wants registered contracts to be allowed and the ban lifted.
"It is quite likely that several of such contracts will turn into international disputes," the group said today. "Not only will the exporters be subjected to huge losses but they will also face claims and arbitrations with their buyers."
India this week halted registration of export contracts until "further orders" and said those registered before April 19 need to be revalidated as it seeks to cool domestic prices and boost supplies. The ban pushed cotton prices in New York to a two-year high on concern reduced exports from the nation may worsen tight global supplies.
Cotton futures for July delivery rose 0.5 per cent to 85.22 cents a pound on ICE Futures US in after-hours electronic trading as of 3:19 p.m. in Mumbai. The commodity rallied the maximum allowed on April 20 after India's ban.
"Any change in the policy of allowing free and unhindered exports would prove detrimental to the reputation of the country as a reliable and continuous supplier of cotton," Cotton Association of India said in the statement. The ban follows the government's decision to impose an export duty on cotton and may discourage cotton plantings, it said.
India's Textile Commissioner will revalidate export contracts registered before April 19, allowing shipments of unshipped quantities on a monthly pro-rata basis, the commissioner said in a statement that day.
India's cotton output will rise to a record 25 million bales in the year starting Aug. 1 from an estimated 23.5 million a year earlier, a US Department of Agriculture unit said in a report on April 15.
"Cotton acreage which has seen a rising trend recently will receive a setback if farmers do not receive a fair price as per international levels as a result of the duty on exports," the association said today.
US durable-goods orders, excluding transportation, jumped in March by the most since December 2007, adding to evidence the economic recovery is strengthening. The Cotton Association of India said the nation's export ban may affect as many as 2.5 million bales. Futures reached to a two-year high of 86.8 cents a pound on April 21.
"The improving macroeconomic situation and India's decision not to export any cotton" drove prices higher, said Robin Rosenberg, a futures strategist at PFG Best Research, a brokerage in Chicago.
Cotton for July delivery rose 1.38 cents, or 1.6 per cent, to 86.2 cents a pound on ICE Futures US in New York. This week, the price climbed 5.7 per cent, the most since mid- February.
India's cotton output will rise to a record 25 million bales in the year starting Aug. 1 from an estimated 23.5 million a year earlier, a US Department of Agriculture unit said on April 15.
"Extremely high US exports" are also boosting prices, Rosenberg said. The country is the top shipper.
Sales of upland cotton to overseas buyers in the week ended April 15 jumped 24 per cent to 347,100 running bales from a week earlier, the USDA said yesterday. Futures have climbed 65 per cent in the past year as global output dropped and demand rebounded.
Orange-juice futures for July delivery rose 1 cent, or 0.7 per cent, to $1.3695 a pound. This week, the price climbed 3.2 per cent, the most since early March. The commodity has advanced 62 per cent in the past year.
Meanwhile: A ban on cotton shipments from India, the world's second-largest grower and exporter, may affect as many as 2.5 million bales of the commodity, an industry group said.
The amount is for the commodity registered for export yet unshipped when the restriction was announced April 19, the Cotton Association of India said in an e-mailed statement, adding that it was "shocked" by the prohibition. The group wants registered contracts to be allowed and the ban lifted.
"It is quite likely that several of such contracts will turn into international disputes," the group said today. "Not only will the exporters be subjected to huge losses but they will also face claims and arbitrations with their buyers."
India this week halted registration of export contracts until "further orders" and said those registered before April 19 need to be revalidated as it seeks to cool domestic prices and boost supplies. The ban pushed cotton prices in New York to a two-year high on concern reduced exports from the nation may worsen tight global supplies.
Cotton futures for July delivery rose 0.5 per cent to 85.22 cents a pound on ICE Futures US in after-hours electronic trading as of 3:19 p.m. in Mumbai. The commodity rallied the maximum allowed on April 20 after India's ban.
"Any change in the policy of allowing free and unhindered exports would prove detrimental to the reputation of the country as a reliable and continuous supplier of cotton," Cotton Association of India said in the statement. The ban follows the government's decision to impose an export duty on cotton and may discourage cotton plantings, it said.
India's Textile Commissioner will revalidate export contracts registered before April 19, allowing shipments of unshipped quantities on a monthly pro-rata basis, the commissioner said in a statement that day.
India's cotton output will rise to a record 25 million bales in the year starting Aug. 1 from an estimated 23.5 million a year earlier, a US Department of Agriculture unit said in a report on April 15.
"Cotton acreage which has seen a rising trend recently will receive a setback if farmers do not receive a fair price as per international levels as a result of the duty on exports," the association said today.