PRESSEMITTEILUNGEN
Cotton prices post steep declines
Friday 08th July '22
Owing to its cyclical nature, cotton’s recent price correction has coincided with the general correction across commodity markets owing to concerns over a global macro slowdown. Cotton prices had previously benefitted from higher oil prices that rendered synthetic fibres, that compete with cotton fibres, more expensive. But now, lockdowns in China (the biggest consumer of US cotton), have had a negative impact on demand. This was evident from US cotton export sales that declined to their lowest level in the current marketing year. One factor weighing on sentiment relates to concerns that China might buy less US cotton in the future after a law came into force in the US that bans the import of goods from the Chinese province of Xinjiang due to allegations that forced labour is being practised there, which China denies. Interestingly Xinjiang is also an important producer of cotton.