BEIJING (Reuters) - Chinese cotton prices closed limit down at their lowest in more than 10 years on Monday, pressured by weak U.S. prices for the fibre and escalating trade tensions.
The most active cotton contract on the Zhengzhou Commodity Exchange, for September delivery, fell the maximum 4% to end on 12,225 yuan ($1,738.95) a tonne, its lowest since March 20, 2009.
The contract, which has been festering at decade-lows in recent weeks, has lost 18.5% so far this year and is down almost 40% from over 20,000 yuan a tonne in May 2018.
Traders cited high cotton stocks in China and plunging U.S. prices for the decline, as well as signs the trade war between the world’s top two economies is unlikely to end any time soon.
China is a major exporter of cotton-based textiles to the United States and there are fears Washington will levy extra duties on Chinese textile products in fresh tariffs on around $300 billion of goods.
ICE cotton futures in New York were down as much as 4.2% on Monday to 56.49 cents a pound, the lowest since March 2016.
($1 = 7.0301 Chinese yuan renminbi)
Reporting by Tom Daly and Hallie Gu; Editing by Joseph Radford