ICE cotton prices dip amid stronger dollar, weak demand from China

Yesterday, the ICE December cotton contract settled at 72.73 cents per pound (0.453 kg), down by 0.67 cents. It touched a low of 71.86 cents, which marked a one-week low.

The US dollar index rose to a six-week high as demand strengthened, with the currency viewed as a safe haven amidst tensions in the Middle East and a dock workers’ strike. The dollar also gained support ahead of the US jobs report, due on Friday. A stronger dollar increased the cost of purchasing cotton for overseas buyers. According to market analysts, in addition to the rising dollar, weaker demand from China was another negative factor affecting cotton futures.

As of 2 October, ICE data indicated that cotton futures contract stocks remained unchanged at 265 bales.

US cotton futures also ignored a better export sales report for the week ending September 26. The report showed that export sales increased by 9 per cent for the week but were down 26 per cent compared to the average of the last four weeks.

Dock workers on the US East and Gulf Coasts began their first major strike in nearly 50 years, affecting roughly half of US shipping and disrupting supply chains. The strike resulted from a breakdown in labour negotiations over wages.

There are rising concerns over drought conditions in Russia and drone attacks on Ukrainian river ports, which are further complicating the global trade environment.

At present, ICE December 2024 cotton was trading at 72.48 cents per pound, down by 0.25 cents. Cash cotton was trading at 66.23 cents (down 0.67 cents), the October contract at 72.49 cents (down 0.67 cents), the March 2025 contract at 74.56 cents per pound (down 0.24 cents), the May 2025 contract at 75.78 cents (down 0.27 cents), and the July 2025 contract at 76.21 cents (down 0.45 cents). Some contracts remained at the previous closing levels, with no trading noted today.

Fibre2Fashion News Desk (KUL)