Chinese cotton industry awaits new policy guidance

06 Sep '13

2 min read

In the absence of new messages from the Chinese Government on this year’s cotton policy, very light trading is seen in cotton markets across China.

At Chinese main ports, offers for all varieties of imported cotton fell by 0.75-0.78 cents, purchase intention of textile mills is not strong, mainly because they are waiting to see whether the Government will change its cotton storage and purchase policy, or opt for giving subsidies to farmers.

The general view is that foreign cotton prices are likely to continue to decline as it is difficult to get the support of downstream demand.

Meanwhile, the domestic cotton prices are stable. Most of the new cotton is growing well and some cotton picking has started in Xinjiang, Henan, Hubei and other cotton growing regions, but most cotton companies are in wait-and-watch mode. These companies are expected to go in for mass purchasing of cotton in mid-September, after the implementation of relevant policy rules.

The current spot price of US C/A cotton is 95.35 cents/lb, with port delivery price of 15,409 yuan/ton, on the basis of sliding tax calculation.

Similarly, the price of Uzbekistan cotton is 99.12 cents/lb, with port delivery price of 15,996 yuan/ton, and the price of Indian cotton is 88.92 cents/lb, with port delivery price of 14,425 yuan/ton.

While the price of domestic Cotton A is 20,131 yuan/ton, and Cotton B is 19,277 yuan/ton.

Overall market analysis is that textile enterprises have adequate stock of cotton, and the industry is waiting for policy guidance in the new marketing year.

Fibre2fashion News Desk - India

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