Cotton Falls on Concern Recession May Erode Demand From China

By Yi Tian

Feb. 19 (Bloomberg) -- Cotton prices fell for the sixth time in seven sessions on concern that China, the world’s largest fiber consumer, may import less as a deepening global slump erodes demand for the country’s textile products.

Chinese imports may drop 29 percent to 1.5 million metric tons this year from 2.11 million in 2008, said Mao Shuchun, a cotton economist at the Chinese Academy of Agricultural Sciences. Last year, China’s cotton imports fell 14 percent from 2007, according to preliminary customs data.

“When the U.S., Europe and Japan buy less from China, buying a lot of foreign supplies is out of the question,” Mao said yesterday by telephone from Anyang, in Henan, China.

Cotton futures for May delivery slipped 0.1 cent, or 0.2 percent, to 45 cents a pound at 9:32 a.m. on ICE Futures U.S. in New York. The price rose 0.9 percent yesterday after dropping 11 percent in the previous five sessions.

Imports fell last year as the textile industry “struggled” to cope with weak demand, the China Cotton Association said on Feb. 11. Exports of apparel and textile products increased 8.2 percent last year compared with a 19 percent gain in 2007, the association reported last week.

China’s textile exports may continue to slow if the global economy deteriorates and governments curtail imports to protect domestic jobs, said the association, the country’s biggest cotton-industry organization.

Before today, the most-active cotton futures fell 36 percent in New York in the past year. China is the biggest buyer of U.S. fiber supplies.

To contact the reporter on this story: Yi Tian in New York at ytian8@bloomberg.net.