The biggest textile group in the world has firmed up plans to purchase 50,000 tons of raw cotton in the current cotton season.
Weiqiao Group plans to issue one billion Yuan of short-term financing bills which will be used to purchase cotton in 2011-12 cotton season.
The Group had begun purchasing cotton from the beginning of the season and hopes to complete purchase of 50,000 tons by March and will spend around 10 billion Yuan on the same.
Meanwhile, China's cotton price continues to maintain a rising trend. Purchase price of cotton grade 3 rose to 19,800 Yuan / ton.
Analysts from the industry are of the opinion that, Weiqiao Group will purchase cotton before the new round of temporary policy for State cotton reserves purchasing.
It is expected that the State will increase prices for procurement under the temporary policy to more than 19,800 Yuan / ton in order to stabilize cotton situation.
This means that it will be difficult for cotton price to decline substantially in the current year, say experts.
Normally the cotton purchase period extends till April or May, but this year it is estimated to close by end of March as cotton textile enterprises have shown higher enthusiasm in purchasing.
Fibre2fashion News Desk - China