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Chaos if cotton reserves released in huge volume - experts

30
Apr '12
Cotton experts predict pandemonium if the Chinese state releases its huge cotton reserves at one go and in huge volumes.

China National Cotton Reserves Corporation has purchased and stored 3.13 million tons of domestic cotton as well as 1 million tons of imported cotton in 2011/2012.

It also has in its reserves; around 300,000 tons of old cotton. The cumulative cotton reserves add up to a massive 4.43 million tons.

It is expected that the state could add another two million tons to its reserves in the current year.

This would ultimately create a storage capacity of 5.43 million tons, a volume which would be difficult to manage and maintain.

According to experts, it is expected that the state might sell at least 2.5-3.0 million tons of these reserves, which could lead to a crash in cotton prices, unless the state fixes a high reserve price.

So they suggest that the reserves should be sold in a long length of period, at an appropriate parity price in the second half of this year or in next year.

Fibre2fashion News Desk - China


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