Cotton Prices Decline on Worries Over Regulation
February 4, 2010 Bloomberg
Catarina Saraiva
Cotton prices dropped, extending the longest slump since September 2008, on investor concerns that stricter banking regulations will reduce commodity trading.
Policy makers and bankers discussed financial-sector regulations last week at the annual World Economic Forum in Davos, Switzerland. U.S. President Barack Obama has called for limits on risk-taking by banks. Cotton has dropped 5.1 percent since January 21.
“Cotton is waiting on outside markets to see if it can rejuvenate itself,” said Keith Brown, the president of Keith Brown & Co., a brokerage in Moultrie, Georgia. “People are just not going to risk money until they know what all the rules are.”
Cotton futures for March delivery fell 0.81 cent, or 1.2 percent, to 68.22 cents a pound on ICE Futures U.S. in New York, dropping for the seventh straight session. Earlier, the price touched 68.2 cents, the lowest level for a most-active contract since November 10.
Cotton climbed 38 percent in the past 12 months as adverse weather hampered the U.S. harvest and damaged crop quality.
(Story found in original format here.)
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