01 jun: Some Brazil Sectors Still At Risk Despite Forex Shift-Deutsche Ba..
01 jun: Peru Cracks Down Hard On Mine Protests, Offers Talks
01-06-2012 22:00:00

Cotton Price's Plunge Reawakens Fears Of Abandoned Contracts

Relateret indhold

--Last year's drop from record high sparked a wave of cancellations from textile mills

--The International Cotton Association has received at least 61 arbitration requests this year

--Analyst expects prices to rebound next year

By Leslie Josephs

Of DOW JONES NEWSWIRES

NEW YORK -(Dow Jones)- Cotton futures on Friday hit their lowest settlement price in almost 28 months, reigniting concerns that contracts will unravel before the fiber is delivered.

Cotton for July delivery on ICE Futures U.S. ended at 68.59 cents a pound, the lowest front-month settlement since Feb. 5, 2010.

Benchmark futures have dropped about 22% over the past month, and the quick decline is reminding the industry of the financially devastating effects last year's price plunge.

Cotton prices ended 2011 down 60% from a record $2.27 a pound hit in March that year, sparking a wave of cancellations from textile mills who had paid for the fiber at high prices and then refused to take delivery.

The Liverpool, U.K.-based International Cotton Association, which sets the rules for most of the world's cotton trade, received a record 242 requests for arbitration that year. The price swing hurt profits at commodity houses such as Olam International Ltd. (O32.SG), Noble Group Ltd. (N21.SG) and Glencore International (GLEN.LN).

The ICA has received at least 61 arbitration requests this year. Between 2000 and 2010, it received 45 requests a year on average.

"There is definitely a concern that it's going to repeat," said Jordan Lea, who sells cotton internationally at Greenville, S.C.-based Eastern Trading Company. "Whenever you have a huge drop in the market, you're going to have these problems."

While business has picked up with the price drop, Lea said his clients are buying cotton for delivery as immediate as two months. Last year, he was selling cotton up to a year in advance.

Sharon Johnson, a senior cotton analyst at Penson Futures, said "The lower cotton goes, the greater issues you have with contracts being honored."

But Johnson expects prices to recover next year, as farmers will likely scale back on plantings due to the low prices. Prices on Friday settled below the 10-year average of 68.95 cents a pound.

"It's incredibly bullish for next year," Johnson said. "You're going to see a huge comeback."

-By Leslie Josephs, Dow Jones Newswires; 212-416-4055; leslie.josephs@dowjones.com

(END) Dow Jones Newswires

June 01, 2012 16:00 ET (20:00 GMT)

Copyright (c) 2012 Dow Jones & Company, Inc.

Opret kommentar

Relateret debat

  • 1 uge
  • 1 måned
  • 1 År
Ingen indlæg

Fondsbørsmeddelelser

TDC gennemfører købet af Get

20-10-2014 15:54:14
TDC gennemfører købet af den norske kabel tv-operatør Get.Samtidig præciseres forventningerne for 2014 inklusive Get. Driftsresultatet, EBITDA, ventes nu at lan..

Halliburton leverer over forventning i tredje kvartal

20-10-2014 13:22:10
Det amerikanske olieserviceselskab Halliburton kom pænt ud af tredje kvartal, hvor både top- og bundlinjen var en spids bedre end ventet i markedet.Halliburton ..

Aktier/middag: Vestas får vinger efter løftet anbefaling

20-10-2014 11:37:53
Det danske aktiemarked følger mandag op på fredagens kurshop og fortsætter til vejrs. Udviklingen er modsat tendensen i det øvrige Europa, hvor der er fald op t..

Mest læste nyheder

  • 24 timer
  • 48 timer
  • 1 uge
1
Aktier/tendens: Spændte investorer klar til sende aktier højere
2
Vestas/Nordea: Kursmålet sænkes og anbefalingen hæves - NY
3
Aktier/middag: Vestas får vinger efter løftet anbefaling
4
Novo/analytikere: Uenighed om Saxenda-effekt
5
Aktier/åbning: Vestas får vinger efter løftet anbefaling

Relaterede aktiekurser

Glencore PLC ORD USD0.01 318,20 -1,0% Fald i aktiekurs
Noble Grp 1,25 0,0% Aktiekurs uændret
Olam 2,11 0,0% Aktiekurs uændret

Køb- og salgsanbefalinger

  • Trend
  • Pengemaskinen

Relaterede selskaber
Få adgang til information og anbefalinger af relaterede selskaber med PLUS pakken.

Du får adgang til 7 værdifulde investorværktøjer til investering.

Klik her og læs mere om PLUS pakken.
Euroinvestor i andre lande: Euroinvestor.com | Euroinvestor.se | Euroinvestor.no | Euroinvestor.fr | Forexinvestor.com| Wisselkoersen.nl | Valuta.se | Valutaveksel.no | Divisas.es | Valute.it
Copyright Euroinvestor A/S 2014  Disclaimer Privatlivspolitik
Aktieinformation leveres af Interactive Data.
Data er forsinket 15-20 minutter iht. de enkelte børsers regler om videredistribution.
 
20. oktober 2014 23:13:24
(UTC+01:00) Brussels, Copenhagen, Madrid, Paris
Version: LiveBranchBuild_20141015.1 - EUROWEB7 - 2014-10-20 23:13:24 - 2014-10-20 23:13:24 - 1 - Website: OKAY

Når du besøger Euroinvestor.dk accepterer du, at der anvendes cookies, som vi og vores samarbejdspartnere benytter til funktionalitet, statistik og markedsføring. Læs mere om cookies på Euroinvestor.dk her

x