Cotton import arrivals decrease at Chinese ports

04 Mar '13

2 min read

The volume of arrival of imported cotton has decreased at Qingdao and Tianjin ports of China, as traders are in a strong wait-and-watch mood.

The main reason for decrease in enthusiasm of traders to buy foreign cotton is the message that base selling prices of cotton to be sold from national reserves is going to remain unchanged till July 2013. According to reports, the Government is tentatively planning to sell 4.5 million tons of cotton from its national reserves by July, which is creating a pressure on foreign cotton.

Secondly, while the price of domestic cotton is stable in China, the prices of imported cotton are on a rise, which is making it unprofitable for traders to import cotton.

On February 28, the delivery price of Indian cotton was quoted at 87.80 cents/lb, up 5 cents/lb compared to mid-February. Similarly, US cotton was offered in the range of 92-94 cents/lb, up 6 cents/lb, and Australian cotton was offered at 100 cents/lb, up 10 cents/lb form prices quoted a fortnight ago.

Prices of Indian cotton variety Shankar-6 that have already cleared customs, was being quoted at around 19,000 yuan/ton in the Chinese domestic market on February 28.

Meanwhile, the price of US cotton that had already cleared customs and other formalities was quoted at 20,300 yuan/ton, which greatly erases the profit margins of traders.

Thirdly, the slow rate of yarn sales of domestic textile enterprises is stopping traders to put orders for foreign cotton.

Lastly, traders are also worried as the Government has so far not made any announcement on issuance of sliding tax quotas. Normally, the Government issues tariff quotas at the beginning of each year, and also announces additional sliding tax quotas. However, no textile enterprise in China has so far received any notice on issuance of sliding tax quota this year.

Fibre2fashion News Desk - China

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