© Reuters. Cotton plantation in Canada. REUTERS/Carlos Osorio
(Reuters) – ICE cotton futures fell more than 4% on Friday as strong and concerns over the broader economic outlook still gripped the market and put pressure on prices in the natural fiber’s worst week in four.
December cotton contracts were down 4 cents, or 4.1%, to hit a low of 92.54 cents a lb.
Prices have fallen for the second week in a row, having dropped about 6.8% so far.
“Cotton is not trading cotton” and is instead tracking and under pressure from macro information such as dollar strength and a negative economic outlook, said Louis Barbera, partner and analyst at VLM Commodities Ltd.
The dollar set a new 20-year high, hitting demand for US cotton among overseas buyers.
Wall Street’s major indexes opened lower on Friday, heading toward June lows, as investors worried the prospect of an economic slowdown and a hit to corporate earnings from the U.S. Federal Reserve’s aggressive monetary policy, tightening to contain inflation.
“In some key markets, like Turkey or Vietnam, (textile) companies are running up to 50% below their usual capacities, but the struggle seems universal,” said Peter Egli, director of risk management at British merchant Plexus Cotton, in note dated Thursday.
(Reporting by Bharat Govind Gautam in Bangalore)