International cotton market prices plummet
According to the “Nihon Keizai Shimbun” report, the cotton trading price in the New York futures market on the 12th was 75.57 US dollars/pound, a 21% decrease from the price at the beginning of the year. The decline exceeded that of crude oil (19%) and raw sugar (17%), and was lower than the historical price. The peak in March 2011 (when the price was $215.15/lb) fell by 65%. The U.S. Department of Agriculture stated twice on May 10 and June 12 that due to the continuous increase in inventories, cotton prices have an obvious downward trend. It is predicted that in 2012 (August 2012 to July 2013), the world’s cotton supply (production volume) will still be 530 million tons, a decrease of 6%) exceeded demand (demand was 500 million tons, an increase of 3%), and inventories increased by 11% to 340 million tons. China is the world’s largest cotton importer. Due to the decrease in exports of clothing to Europe and the decline in domestic textile cotton use, cotton imports in 2012 are expected to be 62.21 million tons, a year-on-year decrease of 42%. India is the world’s second largest cotton exporter. Due to the impact of the economic recession, the rupee has depreciated significantly (currently 1 US dollar = 55 rupees, a 15% depreciation compared with the beginning of the year). Cotton farmers have expanded exports in order to increase the net income of rupee-based cotton. In addition, the fact that cotton futures are in a seller’s market is also one of the reasons for lowering cotton prices. According to statistics from the U.S. Futures Trading Commission, selling volume exceeded buying volume by 24,000 lots on January 24, and still reached 16,000 lots on June 5. Some experts predict that cotton prices will rebound in the future due to China’s financial easing policies, but since the overall supply and demand situation will not change, price increases will lack stamina.
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