by Agrimoney.com
The cotton crop in the US, the top exporter of the fibre, is to suffer its worst ever abandonment rate, sapped by drought in Texas, where more than two-thirds of acres may be lost.
US officials on Tuesday forecast that America's farmers would reap only 9.6m acres of cotton, 600,000 acres less than previously expected, despite plugging an extra 1.1m acres of plantings into their forecast.
Indeed, the data implied an abandonment rate lifted to an all-time high of 30%, "due to historic dry conditions in Texas", the top producing state, Karis Gutter, America's acting secretary of agriculture, said.
In Texas, where data overnight showed 59% of the crop in "poor" or "very poor" condition, the abandonment figure "might come out at 70%, we don't know yet", said Keith Brown, the president of Keith Brown & Co, a brokerage in Moultrie, Georgia.
'Globalisation effect'
Nonetheless, despite the hike in the abandonment rate, from 18.9% last month, cotton prices fell - amid better prospects for some southern hemisphere crops, such as Australia's, which was pegged at a record 4.5m bales, up 250,000 bales on last month's forecast.
"The seasonal outlook is based on expectations of normal winter and spring rainfall coupled with substantial carry-over irrigation water and record-high water allocations in Queensland and New South Wales," USDA analyst Dath Mita said.
Indeed, the price fall was a "clear indication of the globalisation in world cotton", Mr Brown said, besides reflecting reduced hopes for consumption, as prices, which remain elevated by historical standards, temper demand and encourage a switch to man-made fibres.
"Our sources in China say that some mills are selling surplus cotton to other Chinese mills because of a build up in yarn supplies," encouraging them to pull back output.
'Unprecedented cancellations'
Indeed, the USDA highlighted an "unprecedented" level of cancellations of orders of US cotton as spinners idle "portions of their capacity, as they try to work off accumulated yarn inventory in the face of declining cotton prices".
"The dramatic fall in the level of shipments indicates weakening global demand," the department said.
Cotton for December delivery, New York's best-traded lot, stood 3.5% lower at 105.12 cents a pound in late deals.
No comments:
Post a Comment