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Growing Pakistan flood fears revive cotton futures


images (2) Cotton futures rebounded from early lows on fears for a second successive year of crop losses to heavy floods which, reportedly, may have forced more than 1m people from their homes.

New York’s best-traded December cotton lot recovered opening losses to hit 107.75 cents a pound at one point, up the daily maximum of 4.0 cents allowed by the exchange.

The rebound followed reports of growing losses to excessive monsoon rains which are believed so far to have claimed at least 25 lives, and forced widespread evacuations, besides flooding farmland.

Mike Steven said, the influential Louisiana-based cotton analyst, said: "Some traders are starting to take note of excessive rains in parts of Pakistan.

"While there are no predictions of a repeat of last year’s disaster, some traders are likely taking a ‘shoot first and ask questions later’ attitude."

The Pakistan Cotton Ginners Association has estimated that in Sindh, a major growing province, some 1m bales of cotton may be lost to flooding, reducing the province’s crop to 4m bales.

Last year’s tally

Last year’s floods – which the United Nations described as "one of the most devastating natural disasters of our times", being likened to "a slow-motion tsunami" – affected more than 20m people, of which 2,000 were killed, and destroyed 1.6m homes.

Some 2.4m hectares of unharvested crops, worth some $5.1bn, were lost, including an estimated 330,000 hectares of cotton.

Pakistan’s cotton production ended up at 8.8m bales, down 8.3% year on year, on US Department of Agriculture figures.

New York’s December cotton contract stood at 107.66 cents a pound at 15:45 GMT, up 3.6%. The September lot was up the 4.0-cent limit at 108.62 cents a pound, a one-month high for a near-term contract.

http://www.agrimoney.com/news/growing-pakistan-flood-fears-revive-cotton-futures–3492.html

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