Cotton futures jumped to the highest price in 12 weeks on Wednesday, amid signs that demand is increasing in China, the world’s biggest consumer and importer.
To satisfy domestic mill demand, the government began selling from state reserves this week, the China National Cotton Exchange said Tuesday. Imports rose 75 percent in December from a month earlier, another report showed. The U.S. Department of Agriculture on Jan. 11 boosted its forecast of Chinese imports this year by 8.7 percent to 12.5 million bales. Futures fell 18 percent in 2012 amid ample supplies.
“They are going to need to import more cotton over the next six weeks” to replenish stockpiles, Chris Kramedjian, a fiber and textile consultant at INTL FCStone LLC in Nashville, Tennessee, said in a telephone interview.
Cotton for March delivery rose 1.5 percent to settle at 77.33 cents a pound at 2:30 p.m. on ICE Futures U.S. in New York. Earlier, the price reached 77.78 cents, the highest for a most-active contract since Oct. 19.
On Jan. 11, the USDA cut its estimate for domestic production in the year ending July 31, reduced the outlook for stockpiles and boosted its projection for shipments. The U.S. is the largest exporter.
A bale of cotton weighs 480 pounds, or 218 kilograms.
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