Cotton prices in the US have increased 4 per cent from last week on speculations of growing demand from top user China. US cotton certified stock levels continued to fall after peaking in late June, signaling good export demand, says John Robinson, Economist, AgriLife Extension, College Station. OA Cleveland, Economics Professor, Mississippi State University and Consultant says, more gains could be in store due to a squeeze in large outstanding short positions. The price surged 51 per cent in past year on two straight projected deficits.

Data from the US Commodity Futures Trading Commission show, sales from unfixed cotton call have increased 69 per cent from a low in March. Sellers may have to go long on futures to close their positions. Other buyers in Turkey and Pakistan are also looking to US supplies, Cleveland adds.

Heavy rains may threaten the quality of cotton across the Coastal Bend of Texas, and very wet conditions in the next 10 days will delay harvesting in West Texas, the biggest growing area, adds Donald Keeney, Senior Meteorologist, Maxar Technologies’ Growing regions around the Mississippi Delta will also be drenched this week.

Despite costs of making clothing and T-shirts rising, retailers will have a hard time passing expenses on to consumers due to curb in discretionary spending and lack in rise of wages, according to Plexus Cotton’s Egli.