Cotton futures fall as Chinese demand weakens

Cotton fell for a second day on futures markets on speculation that record prices will dampen Chinese demand, Bloomberg reported. Cotton prices gained 72% this year and prices in China exceeded US$2 per pound as poor harvests caused demand to outstrip supply, but the buying binge appears to be slowing. "Big buyers have satisfied their needs and are going to wait and see now," said John Flanagan, president of Flanagan Trading. He said developing nations may be waiting for prices to drop before buying more cotton. Chinese purchases of cotton on international markets declined 23% toward the end of November. Inventories, which are down 75% year-on-year, have begun to increase again; US stockpiles rose 7.3% on Tuesday from Monday’s levels. Cotton contracts for March delivery closed down 0.05%, after earlier slipping by 1.7% before recovering.