Home / Knowledge / News / Textiles / 'Chinese policy to determine world cotton prices' - ICAC
'Chinese policy to determine world cotton prices' - ICAC
02
Jul '13
The Cotlook A Index rose to 96.65 cents per pound around mid-June 2013 before receding to the low 90s cents level towards the end of the month.

On June 12th, the USDA increased 2012/13 U.S. export estimate to 3 million tons due to continued strong sales to China, and lowered the estimate of 2013/14 U.S. production to 2.9 million tons due to drought in the southwest. The Cotlook A Index rose 2.90 cents per pound the following day.

A week later, the Federal Reserve’s signal that it could start scaling back its huge economic stimulus program later this year triggered only a modest drop of 1.75 cents per pound in the Cotlook A Index.

China’s national cotton reserve is estimated at close to 9 million tons as of the end of June, and the reserve may be down to 8 million tons by the end of July. Purchases into the reserve will resume in September as the 2013/14 harvest begins.

In May the International Monetary Fund lowered its forecast for China’s growth to 7.75% this year. The new administration in China has initiated a series of reforms designed to open up the economy to private investment and speed up urbanization which will likely accelerate the reduction of cotton area.

In June, the People’s Bank of China stated that the government was willing to tighten monetary policy to achieve more stable economic growth. The new policy already had an immediate impact on spinners who are reducing purchases from the reserve, which requires payment upon delivery, and expanding imports with 90-day letters of credit.

All in all, China’s cotton policy remains the main driver of world cotton prices. With the recent acknowledgement of the market distortion created by its national cotton reserve programs, Chinese policymakers are already planning to experiment with a direct subsidy in Xinjiang. At the provincial level, in an effort to stop the rapid decline of cotton planting in Hebei, cotton farmers were paid a direct subsidy in April this year.

Since 2010/11 world cotton production has exceeded world cotton consumption. While the 2012/13 global ending stocks are expected to be approximately split evenly between China and the rest of the world, China is projected to hold close to 60% of the global stocks by the end of 2013/14.

International Cotton Advisory Committee


Must ReadView All

L-R: Surya Ajay Agarwal (Director - Donear), Vikram Mahaldar (MD - OCM) & Rahul Rajendra Agarwal (Director - Donear)

Textiles | On 20th Nov 2017

Promoters of Donear Group acquire OCM Woolen Mills

The promoters of Mumbai-based Donear Group have announced the...

NRF welcomes US Senate committee approval on tax reform

Textiles | On 20th Nov 2017

NRF welcomes US Senate committee approval on tax reform

The National Retail Federation (NRF) has welcomed the approval of tax ...

NTGM opens garment export facility in Yangon

Apparel/Garments | On 20th Nov 2017

NTGM opens garment export facility in Yangon

Nordic Technology Group Myanmar Ltd. (NGTM) recently initiated...

Interviews View All

Nitin Soni
Dolphin Jingwei Machines

Taxation policies need to be made simpler

Darshan Mehta
Infinium Polychem

We are spending double digit figures on R&D

Smarth Bansal
Colorjet India Limited

We would like to venture more companies into the Indian market

Sugandha Bhardwaj

<div>New Delhi-based Brinjal Designs Pvt Ltd manufactures home furnishing...

Liz Manning

<div><b>Liz Manning</b>, Business Development Manager at Catexel, has...

Nitesh Mittal

Kusumgar Corporates is a leading manufacturer of technical textiles and...

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Marten Alkhagen
Swerea IVF AB

Marten Alkhagen, Senior Scientist - Nonwoven and Technical Textiles of...

Silke Brand-Kirsch
Schlegel und Partner

Silke Brand-Kirsch, executive partner of Schlegel und Partner, a leading...

Prathyusha Garimella
Prathyusha Garimella

Hyderabad-based designer <b>Prathyusha Garimella</b> is known for blending ...

Yash P. Kotak
Bombay Hemp Company

One of the directors of Bombay Hemp Company, Yash P. Kotak, speaks to...

Aditi Somani
Aditi Somani

Aditi Somani specialises in luxury fusion wear with international cuts and ...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

November 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
68.5%
No
12.4%
Skip
19.1%

Total Votes: 89

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
61.8%
No
30.3%
Skip
7.9%

Total Votes: 89

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
86.5%
No
10.1%
Skip
3.4%

Total Votes: 89

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
80.9%
No
9.0%
Skip
10.1%

Total Votes: 89


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search