Cotton Surges to Record as Supplies Are ‘Worth Gold’ Amid Fiber Shortfall

Cotton rose to a record on signs that global supplies may not satisfy demand in China, the world’s biggest consumer and producer.

China will actively expand imports this year, the Ministry of Commerce said today in Beijing. The country’s January imports jumped 31 percent from a year earlier to 390,720 metric tons, the customs agency said last month. Prices have more than doubled in the past year as consumption outpaced global supplies.

“Demand fundamentals are working themselves out,” said David Zeanah, a commodity broker at Keith Brown & Co., a brokerage in Moultrie, Georgia. “We don’t have any cotton; everything you can get your hands on is worth gold right now.”

Cotton futures for May delivery rose by 1.44 cents, or 0.7 percent, to $2.1414 a pound at 2:50 p.m. on ICE Futures U.S. in New York, the seventh straight gain and the longest rally since September 2009. Earlier, the price soared by the exchange limit of 7 cents to a record $2.197.

U.S. export sales of upland cotton surged 56 percent to 403,341 bales in the week ended Feb. 24 from a week earlier as shipments increased to China, Turkey and Bangladesh, the U.S. Department of Agriculture said March 3. A bale weighs 480 pounds, or 218 kilograms.

(Source: http://www.bloomberg.com/news/2011-03-07/cotton-advances-by-daily-limit-to-record-on-outlook-for-demand-from-china.html)