04 Apr '25
(Fibre2Fashion News Desk (KUL): ICE cotton futures crashed on Thursday due to uncertainty surrounding US cotton exports. The natural fibre experienced its worst single-day meltdown in the past two years. The reciprocal tariff announced by US President Donald Trump may trigger retaliatory tariffs from other countries, potentially impacting US exports.
Insights
ICE cotton futures saw their sharpest single day fall in two years, driven by uncertainty around US cotton exports following a new US tariff policy.
President Trump's 10 per cent base tariff sparked fears of global retaliation, leading to widespread selloffs.
May 2025 cotton dropped 4.4 per cent, with high trading volume reflecting market panic.
Yesterday, the ICE cotton May 2025 contract settled at 64.80 cents per pound (0.453 kg), down 3.00 cents. The contract plummeted by 4.4 per cent, reaching its lowest level since March 7. The July contract also ended at 65.71 cents, with a loss of 300 points. The December 2025 contract settled at 67.55 cents, down 284 points. Other contracts settled with losses ranging between 90 and 283 points.
The total volume traded was 97,184 contracts—the 16th highest ever recorded on ICE. The previous day's cleared volume stood at 74,969 contracts. Cotton futures have surpassed 90,000 contracts in a day 32 times historically; eight of those have occurred in 2025, indicating active trading this year. ICE-certified deliverable cotton stocks as of April 2 remained unchanged at 14,488 bales.
The sharp decline was triggered by a new US tariff policy, which created panic across global financial markets. On April 2, President Trump signed an executive order imposing a 10 per cent ‘minimum base tariff’ on all trading partners. The order also enables higher tariffs on selected countries, intensifying trade uncertainty.
This led to a widespread sell-off, not just in cotton but also in stocks and grains. Analysts expect certain countries to respond, which could influence future cotton demand.
However, the USDA export sales report for the week ending March 27 showed net sales of 129,100 bales—up 53 per cent from the previous week but down 26 per cent from the four-week average. Export sales to China dropped by 21,300 tons, while bookings for the next marketing year rose by 40,000 bales.
Currently, ICE cotton for May 2025 is trading at 63.72 cents per pound (down 1.08 cents), cash cotton at 62.22 cents (down 3.33 cents), the July 2025 contract at 65.01 cents (down 0.70 cents), the October 2025 contract at 67.52 cents (down 0.09 cents), the December 2025 contract at 67.18 cents (down 0.37 cents), and the March 2026 contract at 68.35 cents per pound (down 0.39 cents). A few contracts remained at the level of the last close, with no trading noted today. (Source: Fibre2Fashion.com)