By Kirk Maltais 

U.S. cotton growers were just clawing back from a tough year in which the U.S.-China trade war sent prices plummeting. Now the coronavirus pandemic has set them back again.

Cotton futures on the Intercontinental Exchange were trading at their lowest levels since 2010 on Friday, with the most-active futures contract trading down 2.3%, to just below 54 cents a pound. Since the start of the year, they have shrunk by 23%.

Cotton growers and traders were hoping that prices would post a sustained recovery after a cease-fire in the two-year trade war that roiled markets world-wide. China has been a major consumer of U.S. cotton, and the trade war sent prices to a nearly-four year low last summer.

Earlier this year, strong export sales to countries such as Pakistan and Vietnam, as well as the signing of the phase-one partial trade agreement between the U.S. and China, gave hope to U.S. growers that higher prices were around the corner.

That hope is disappearing as the new coronavirus spreads around the globe. Factory shutdowns around the world, combined with fear and caution among consumers and businesses, are expected to drag down the global economy. JPMorgan Chase & Co. analysts are estimating a 1.1% loss to world gross domestic product in 2020.

The U.S. Department of Agriculture was already estimating that acres of planted cotton in the U.S. would fall 9% in 2020, to 12.5 million, largely because the trade war had made farmers cautious. The reduction in acres is expected to cut into U.S. production by 600,000 bales.

But demand might fall even faster than the shrinking supply. Coronavirus is forcing clothing retailers like Inditex -- which owns the Zara brand -- and H&M Hennes & Mauritz AB to shut stores world-wide.

"There's so much uncertainty right now," said Jon Devine, senior economist with Cotton Incorporated, a trade group representing cotton farmers.

What's more, the number of cotton acres that actually gets planted may be even lower than what the USDA is anticipating, with farmers worried that cotton demand will keep falling. But the timing couldn't be worse. With the cotton planting season beginning now and lasting into April, farmers have no time to choose another crop to grow instead.

"There hasn't been a lot of time for farmers to gear up and change plans, " said Daniel Kowalski, vice president of the research arm for agricultural lender CoBank.

The problems for cotton farmers are myriad, Mr. Kowalski said. Not only does cotton farming use different machinery to plant and harvest crops than corn or soybeans, but the economic outlook for those more traditional crops is also shaky due to the coronavirus. "There's risk all over the potential crops," he said.

Corn and soybean futures on the Chicago Board of Trade have dropped this year, with corn so far down 12% and soybeans down nearly 11%.

Cotton farmers are hopeful that prices will soon stop falling. Some traders think they will.

"We've had new lows each day, but volume is lower each day, which is a sign of a near bottom," said Josh Graves, senior market strategist with RJO Futures.

Write to Kirk Maltais at [email protected]