Cotton prices slid in February, dipping below $0.57 per pound for the first time in more than a year, according to data from the U.S. Department of Agriculture (USDA).
The seven-market U.S. average cotton spot price, which ended 2015 at $0.6262 per pound, plunged by almost 11 percent in the first two months of 2016, $0.56. The low for the year, just over $0.56, was reached in late January. The high of almost $0.65 happened in June.
Soft cotton prices are expected to continue as reductions in both supply and demand grip the world market. The USDA has decreased its forecasts for both global production and consumption in each of the past six months.
In the latest month, the estimate for the world cotton crop was reduced by 172,000 bales, to 101.4 million, down from 119.2 million in the prior year season.
The largest country-level reductions for production have been for India, Brazil and several African countries.
The most current estimate for the world’s consumption was reduced by 1.3 million bales, to 109.6 million. The largest reductions in consumption have been for China, largely because of lack of information about sales of its huge cotton reserves.
The ending stock estimate for the current season is now 104.1 million, a sizable drop from 2014/2015’s 112.2 million bales.
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