Cotton prices dropped 27% as good weather boosted prospects for US harvest

LONDON: Cotton dropped to a fiveyear low in New York on speculation that restricted imports by China, the world’s largest buyer and producer, will leave more supplies with inventories already at a record high.

Cotton prices dropped 27% this year as good weather boosted prospects for the US harvest. China then said on September 22 it will restrict imports for 2015. Carter’s, the Atlanta-based maker of children’s clothing, says lower cotton costs will show up in next year’s line up. “If you put all the factor together on top of the fact we’re sitting on record high ending stocks, it’s just a quite uncertain outlook,” said Tracey Allen, an analyst at Rabobank International in London. “Lower import costs is good news for any end user.”

Cotton for December delivery dropped 2.4% on ICE Futures US in New York earlier on Wednesday falling to 61.07 cents, the lowest for a most-active contract since October 5, 2009.

“Cheaper cotton that is coming to the market now will be a benefit for goods going to be produced for the fall 2015 season and beyond,” Carter’s CEO Michael Casey told analysts in a September 3 conference call. “Cotton has come down about 25%.” Carter’s owns OshKosh B’gosh.

Cotton inventories before the start of this year’s harvest on August 1 were 100.3 million bales, 12% higher than a year earlier and a record, according to the US