ICE cotton slips from six-week high on tariff concerns

ICE cotton futures eased on Wednesday after reaching a six-week high earlier in the session. A weaker US dollar and a decline in the US cotton planting outlook helped cap losses. Analysts noted that the higher tariffs announced by US President Donald Trump may not support cotton exports. However, strong demand and reduced acreage are seen as positive factors for the natural fibre. ICE cotton prices declined further on Thursday, reflecting negative sentiment following the tariff announcement.

Yesterday, the ICE cotton May 2025 contract settled at 67.80 cents per pound (0.453 kg), down 0.45 cent. During early trading, the contract touched an intra-day high of 68.52 cents—the highest level since February 19. The December 2025 contract also eased, falling 42 points to settle at 70.39 cents. Other contracts settled with losses ranging from 1 to 47 points.

ICE cotton futures declined after reaching a six-week high, pressured by market uncertainty following new US tariffs.
While a weaker US dollar and reduced US planting outlook supported prices, analysts say the tariff move may hinder exports.
USDA forecasts a 12 per cent drop in 2025 US cotton acreage.
Cotton demand, lower acreage, and stable stocks continue to offer market support.

A weaker US dollar supported cotton demand by making the commodity cheaper for overseas buyers. Meanwhile, Chicago grain futures declined, with soybeans retreating from a one-month high reached in the previous session.

Trading volume was 74,969 contracts, following 82,379 contracts cleared the previous day. ICE data showed that as of April 1, deliverable No. 2 cotton futures contract stocks remained unchanged at 14,488 bales.

The USDA’s planting intentions report estimated 2025 US cotton acreage at 9.8 million acres, a 12 per cent decline from 2024.

On April 2, US President Trump signed an executive order imposing a 10 per cent minimum base tariff on trading partners, along with higher tariffs on certain nations. Market analysts said that while the tariffs may not be beneficial, cotton demand, exports, and reduced acreage remain positive factors for the market.

Currently, ICE cotton for May 2025 is trading at 65.72 cents per pound (down 2.08 cents), cash cotton at 65.55 cents (down 0.20 cent), the July 2025 contract at 66.73 cents (down 1.98 cent), the October 2025 contract at 70.37 cents (down 0.47 cent), the December 2025 contract at 68.61 cents (down 1.78 cents), and the March 2026 contract at 69.76 cents per pound (down 1.81 cent). A few contracts remain at their last closing levels, with no trading reported today.

Fibre2Fashion News Desk (KUL)