Volume of cotton with Chinese govt down to 7.2mn tons

The declining stock in China is due to shortfall in production, according to the International Cotton Advisory Committee (ICAC). “In 2016-17 season, China’s cotton production declined by 2 per cent to 4.9 million tons, but its mill use is projected to increase by 2 percent to 7.7 million tons. Imports by China are anticipated to increase by 10 per cent to 1.06 million tons, which is the first increase since 2011-12, though any further increase is limited by the import quota. Thus, sales from the reserve are being used to make up for the shortfall in production while mill use is forecast to remain unchanged at 7.7 million tons in 2017-18,” ICAC said in its latest report.

While cotton stocks are diminishing in China, stocks held outside of China are forecast to rise by 6 per cent to 8 million tons at the end of July 2017. Despite the growth in stocks held outside of China, international cotton prices as measured by the Cotlook A Index have averaged 82 cts/lb from August 2016 through May 2017, which is well above the long-term average of 70 cts/lb. (RKS)

Fibre2Fashion News Desk – India