Interviews
Cotton prices expected to maintain upward trend
02 Dec '09
2 min read
Recently, the auctioning of state reserves cotton has undoubtedly become the focus of market attention. On November 19, the state announced the third round of release of 500,000 tons of cotton reserves into the market.
As of November 27, 108,000 tons were traded in the third round auction of national reserve cotton, accounting for 21.7 percent of the planned amount, which lead to an easing in the demand and supply situation in the markets.
Even so, the selling price in the state reserve cotton created a record by selling one lot for more than 15,000 Yuan per ton. Higher auction price of state reserve cotton has a limited role in suppressing spot cotton price.
In addition, thanks to effective implementation of economic policies to stimulate domestic demand, domestic consumption growth of China's textile and apparel is apparent, which will be more apparent at the year-end, which ushers in the peak season.
At present, fundamentals in cotton market are still bullish, but commodity market is rising too fast, coupled with the upcoming central economic conference by the year-end that may adjust monetary policy, as well as other factors, uncertainty in future trend for commodity market is increasing.
Cotton is a typical commodity under control of policy, all the factors will put pressures on cotton, such as the release of national reserve cotton, import quotas for 2010 to be issued by the end of this year, but solid fundamentals will give strong support to cotton prices.
Therefore, comprehensive analysis indicates that cotton price will continue to maintain an upward trend in long term.
As of November 27, 108,000 tons were traded in the third round auction of national reserve cotton, accounting for 21.7 percent of the planned amount, which lead to an easing in the demand and supply situation in the markets.
Even so, the selling price in the state reserve cotton created a record by selling one lot for more than 15,000 Yuan per ton. Higher auction price of state reserve cotton has a limited role in suppressing spot cotton price.
In addition, thanks to effective implementation of economic policies to stimulate domestic demand, domestic consumption growth of China's textile and apparel is apparent, which will be more apparent at the year-end, which ushers in the peak season.
At present, fundamentals in cotton market are still bullish, but commodity market is rising too fast, coupled with the upcoming central economic conference by the year-end that may adjust monetary policy, as well as other factors, uncertainty in future trend for commodity market is increasing.
Cotton is a typical commodity under control of policy, all the factors will put pressures on cotton, such as the release of national reserve cotton, import quotas for 2010 to be issued by the end of this year, but solid fundamentals will give strong support to cotton prices.
Therefore, comprehensive analysis indicates that cotton price will continue to maintain an upward trend in long term.
Fibre2fashion News Desk - India
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