Cotton Declines to 21-Month Low on Increasing Global Stockpiles

Cotton tumbled to a 21-month low, trimming costs for clothing retailers including Gap (GPS) Inc., after a U.S. government report showed global inventories will gain and data from Asia showed a further slowdown in industrial output. Cotton for July delivery declined as much as 5.7 percent to 77.16 cents a pound, the lowest price for a most-active contract since July 2010, on ICE Futures U.S. in New York, and traded at 78.55 cents at 9:18 a.m. in London. Futures declined for an eighth day, the longest losing streak since June 4, 2010. The fiber has lost 64 percent since reaching a record in March 2011 as higher prices spurred farmers to boost plantings and demand in China fell. World stockpiles will climb 10 percent to 73.75 million bales in the season from Aug. 1, the U.S. Department of Agriculture said yesterday. Industrial output slowed in China and shrank in India, adding to concerns global growth is slowing as European leaders tackle the debt crisis. “If China’s slowing more than expected then it drives the risk-off attitude in commodity markets,” said Michael Creed, an agribusiness economist at National Australia Bank Ltd. “The market is still trying to come to grips with the weakening global economy and a market that’s looking increasingly comfortable in terms of how well it’s supplied.”