Report: Improving Global Economy Sparks Demand for Cotton

By Jim.Robinson|April 13, 2010

The ICE No. 2 cotton nearby futures prices traded in a range of 78 to 84 cents during March with the tighter outlook for cotton stocks during 2010 keeping upward pressure on prices, a report from Rabobank said.

An improving global economy continues to underpin cotton demand at higher levels than was experienced in 2008/09. Global cotton demand is expected to be up 5 percent year-on-year in 2009/10.

Although it is expected that higher cotton prices will lead to increased plantings of cotton globally in the 2010/11 crop year, with the USDA’s March 31 Prospective Planting report showing the area to cotton in the U.S. increasing 15 percent in 2010, to 10.5 million acres, it is likely that the pressure on closing stocks at current demand expectations will support prices throughout the remainder of the year.