| Date: |
23-11-2010 |
| Subject: |
Chinese, Indian Action Forces Cotton Down |
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China reducing the pace of cotton growth and India enhancing the planting of the soft fiber spawned beliefs that global demand for it will slide, Bloomberg reports.
Amidst cotton's price sinking to a four week low in New York and its futures slipping in Zhenzhou, China - the world's largest cotton importer - ordered its banks on Friday to preserve larger amounts of reserves as a method of curbing inflation. Thus far this year, China has done that five times, which impacts prices of various commodities the nation trades, imports and exports.
"Like soybeans in Chicago, cotton is very sensitive to any impact on China's demand," Han Sung Min, a broker at Korea Exchange Bank Futures Co. in Seoul, told Bloomberg.
He suggested keeping an eye on today's futures, noting the wobbly dollar might limit further descent of cotton.
India, as the globe's second-largest grower of cotton, experienced monsoons which influenced the nation's farmers to plant more fiber, according to the Cotton Association of India. The association said cotton production since October 1, when the year started, might increase 3.6 percent to 35.7 million bales from September's forecast.
Source : danielstrading.com
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