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National cotton stocks of just over one month
Mar '11
According to a sample survey, average cotton stock with Chinese enterprises can last nearly 34 days, as of March 7. It includes imported cotton stationed at ports too. In quantity, stocks for national cotton were nearly 974,000 tons. This sample survey was conducted by the Monitoring System of National Cotton Market.

As per these data, average cotton stock with Chinese enterprises declined 18.3 percent compare to the previous month but recorded a 9.6 percent rise on year to year basis. Industrial stocks for national cotton also declined 18.3 percent compared to the previous month but recorded a 9.1 percent rise on year to year basis.

As per data released by China Fiber Inspection Bureau, output of lint cotton above grade 3 declined 29.63 percent this year. The lint cotton above grade 3 has a lion's share of 36.09 percent in cotton production this year.

Besides, high-grade cotton production is only 2,185,900 tons this year. It was 4,432,800 tons for the same period last year. This year, cotton produced above grade 3, accounts for 6.17 percent in total production. That too is significantly lower compared to the average level of previous year. Due to these reasons, cotton sales growth rate declined.

Because of decline in sales of finished yarns in downstream sector, most of the enterprises prefer not to increase cotton stock with them as it needs a big cash flow. With no signs of a price rise, they are not interested in procurement of spot cotton.

In addition to that, downstream textile industries prefer Xinjiang cotton and imported cotton instead of inland cotton. This was the main reason for slow sales growth of inland cotton.

Fibre2fashion News Desk - China

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Courtesy: AWI

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