Global cotton demand will drop more than expected a month ago as slowing retail sales and tightening credit cut purchases by textile mills, industry researcher Cotlook Ltd. said in a report yesterday. The Standard & Poor's 500 Index fell as much as 6.1 percent today on concern the deepening economic slump will reduce earnings.
"Cotton is down with a lot of other commodities because of what's happening with the equities overnight and the energy prices,'' said Sharon Johnson, a senior analyst at First Capitol Group in Roswell, Georgia.
Cotton futures for December delivery dropped 2.85 cents, or 5.8 percent, to 46.23 cents a pound on ICE Futures U.S. in New York. Earlier, the price touched 46.08 cents, the lowest since Oct. 16. The most-active contract has fallen 28 percent in the past year.
The Reuters/Jefferies CRB Index of 19 raw materials plunged as much as 3.3 percent, led by gasoline, cotton and copper. Today's drop marked the lowest level for the index since January 2004.
Cotlook lowered its consumption forecast for China by 1.9 percent from a month ago to 10.4 million tons and estimated the Indian subcontinent will use 7.24 million tons, 1.2 percent less than expected in September.
