By Bloomberg News - Dec 14, 2010 3:35 PM GMT+0530 Tue Dec 14 10:05:38 GMT 2010
Prices of cotton in China will probably remain at “high levels” and won’t trade below 25,000 yuan ($3,757) a metric ton, the Cotton Research Institute said, citing a survey of farmers and processors.
Shortages, rising production costs and inflation will support prices, the researcher said in a report posted on the website of the China Cotton Association today, without giving a timeframe for the price forecast. The report was prepared after November surveys of 1,628 farmers in 15 provinces, it said.
The price of seed cotton has increased 75 percent from last season to an average 10.80 yuan per kilogram, it said. Cotton futures for September delivery on the Zhengzhou Commodity Exchange rose 1.9 percent to close at 28,105 yuan a ton today.
Cotton for March delivery traded on ICE Futures U.S. in New York jumped by the exchange limit of 5 cents to $1.4597 a pound today, the highest price since Nov. 10, before trading at $1.457 a 5:30 p.m. Singapore time. The most-active contract reached a record $1.5195 on Nov. 10 and has surged 93 percent this year.
Most of farmers responding to the survey said they wanted to increase planting, the report said. Still, higher costs of materials, labor and “complicated management cloud the prospect of increased cotton planting,” it said.
The institute is a unit of the state-run Chinese Academy of Agricultural Sciences, according to its website.
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