Cotton prices have continued to weaken on uncertainty surrounding the coronavirus. In recent trading they fell below 68 cents, and are likely to remain in the 67.00-68.50 range.
"Typically, such market impacts are intially overstated and the market is reasonably quick to recapture ground. However the uncertainty of the severity of the virus outbreak has stifled the Chinese economy and brought major portions of its manufacturing to a near halt," said industry expert O.A. Cleveland, in his weekly market report.
"Thus, in the face of an excellent export sales report [from the US] that included a significant improvement in export shipments, cotton prices continued to slump.
"This unexpected event has heavily impacted the world cotton market," he added.
There are concerns that a prolonged health issue in China could push world cotton consumption down 500,000 bales or more below pre-virus estimates. The carryover stock would potentially reduce US exports by a similar amount.
"While many do not consider the virus as a world threat, the market disruption is much more pronounced than the SARS virus that originated in China in 2003," he added.