Supply deficit to lead higher cotton price in global market

The cotton price hit 3½-month high of more than 65 US cents per pound in mid of this month. Yesterday, the price level fell down to below 64 US cents due to fall in exports. Last week, only 78,700 bales of cotton were exported that is 73% less than previous week, reveals US Department of Agriculture. 

The USDA revised down its cotton exports for this crop year to 111.39 million bales on Wednesday. China's demand for the crop is likely to fall by 500,000 bales, foresees Commerzbank.  Hurricane Joaquin caused the crop in US to reduce by 250,000 bales. 

"The larger deficit has given rise to a 1.7 million bale downward revision of global ending stocks to 104.39 million bales. This still corresponds to more than 90% of global consumption, however, which should preclude higher prices", says Commerzbank.