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US cotton prices plunge amid China’s retaliation

May 24, 2019

1 mins read

Mintec US cotton prices have slumped in May to the lowest price since September 2016, falling from highs of $79 cent per pound on 10th April to a low of $67 US cents on 22nd May. This was a result of China retaliating days after the US had increased tariffs to 25% on Chinese imports. As China is the number one importer of US cotton, this tariff has caused prices to slump.

The significant drop in US cotton prices was further supported by the release of the WASDE report, which anticipates both higher US production and ending stocks for 2019/2020. According to the USDA, global cotton production for 2019/20 is forecast up 6% y-o-y, driven by anticipations of higher yields in the US and India.

The US cotton production is forecast at 22 million bales, up 20% compared to 2018/19 season, driven by recent wetter-than-average conditions being favourable for the development of crops. Consequently, the cotton market has continued its bearish sentiment.

wheat market outlook food commodity prices

Alana Ribeiro
Alana Ribeiro

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