NEW YORK: ICE cotton futures fell to their lowest level in nearly three weeks on Tuesday on a stronger dollar and concerns over trade relations between the natural fibre's top exporter, the United States, and the top consumer, China.
Cotton contracts for December settled down 0.97 cent, or 1.5%, at 64.02 cents per lb, having earlier hit their lowest since Aug. 20 at 63.60 cents per lb.
"People are once again worried about the trade with China and the dollar is extremely strong which is bearish (for cotton)," said Sid Love, commodity trading adviser at Kansas-based Sid Love Consulting.
Ratcheting up tensions between the world's top economies, President Donald Trump on Monday raised the idea of separating the US and Chinese economies, also known as decoupling.
The United States will also move on Tuesday to block imports of cotton products from western China's Xinjiang region over allegations they are produced with forced labor, officials with US Customs and Border Protection told Reuters.
Investors now eye the US Department of Agriculture's (USDA) weekly crop progress report due later in the day, and the monthly supply-demand report due on Friday.
The pandemic has battered demand for the natural fibre, while US-China tensions have added to the worries, sending prices about 9% lower so far this year.
Total futures market volume rose by 15,515 to 37,010 lots.
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