Cotton futures in New York jumped to a record, gaining by the daily limit for a third day, on signs that growers may struggle to meet mounting demand from China, the world’s biggest consumer. Cotton for March delivery gained 2.7 percent to $1.5412 a pound on ICE Futures U.S. in New York at 4:15 p.m. Tokyo time. Prices have more than doubled this year, heading for the biggest annual gain since 1973. Output in China’s Shandong province, the nation’s second- biggest producer, dropped 22 percent this year from 2009 after natural disasters hurt crops, the region’s Agriculture Information Center said in a report Dec. 17. Demand in China is forecast to exceed supply by 17 million bales in the year ending July 31, according to the U.S. Department of Agriculture. U.S. cotton farmers may plant the most acres in five years, Memphis, Tennessee-based researcher Informa Economics Inc. said on Dec. 17. “Informa’s forecast for an increase of planting acres in the U.S. was not enough to ease current tight supply,” said Han Sung Min, a broker at Korea Exchange Bank Futures Co. in Seoul. U.S. planting will increase to 13.041 million acres (5.3 million hectares) in 2011, compared with 11.038 million that the government estimated was sown this year, Informa said. In November, Informa estimated planting at 12.227 million acres. Stockpiles in the U.S., the biggest supplier, for the year ending July 31 may be 1.9 million bales, the lowest projected level since May 1996, when Bloomberg data begins, the USDA said Dec. 10. That’s 14 percent lower than the November estimate. India Demand In India, the second-biggest grower, output may total 34.75 million bales in the year started Oct. 1, about 2.7 percent less than the 35.7 million estimated last month, a group said. Local demand may be 26.6 million bales of 170 kilograms each, compared with 25 million bales a year earlier, the Cotton Association of India said Dec. 18. Production in China’s Shandong province was 718,400 tons on an area of 11.5 million mu (760,000 hectares), while yields fell 18.5 percent to 62 kilograms per mu, the center’s report showed. September-delivery cotton on the Zhengzhou Commodity Exchange advanced as much as 3.1 percent from the previous settlement to 28,690 yuan ($4,302) a ton before closing at 28,410 yuan. To contact the reporter on this story: Jae Hur in Tokyo at jhur1@bloomberg.net To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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