ICE cotton prices experienced a rise fueled by robust demand from China, although gains were somewhat restricted due to a stronger dollar, which effectively increased costs for foreign buyers. The March 2025 contract settled at 70.77 cents per pound, marking an increase of 0.34 cents, and culminating in a significant weekly gain of 2.7 percent—the largest increase since September.
As the market shifts into holiday mode, there has been a noticeable dip in trading volume. China emerged as a key player, accounting for 21,400 tons of US cotton exports. The price surge in ICE cotton was also attributed to short covering amid signs of strong demand from China and an upswing in crude oil prices, which gained 6 percent over the week due to developments in the Russia-Ukraine situation.
However, the dollar index soared to a 13-month peak, limiting the potential gains in cotton prices by making it more expensive for international buyers. The market reported a trading volume of 29,105 contracts, the lowest in seven weeks, compared to the previous day’s 34,339 contracts.
Analysts noted that the rebound in prices can be linked to record short positions, prompting traders to cover their bets. In addition to the solid export figures from China, there was a notable increase in export sales by 16,000 bales for the upcoming market year. The March 2025 contract settled at 70.77 cents per pound, while cash cotton prices reached 66.77 cents. Other contracts, including the December 2024 contract, settled at 71.65 cents, the May 2025 at 71.89 cents, the July 2025 at 73.00 cents, and the October 2025 at 71.65 cents, all reflecting minor increases.
In summary, the cotton market is experiencing upward momentum due to surges in demand from China and higher crude oil prices, while the stronger dollar continues to pose challenges for international trade. The landscape ahead appears poised for fluctuations as the market transitions into the holiday trading period.
