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Cotton inventories on the rise

19
Nov '08

According to a recent official survey, by the end of October, domestic commercial cotton inventories, including foreign cotton, but excluding state reserve cotton in the country totaled to 2.8 million tons, representing an increase of 840,000 tons from that of end September.

Among them, inland business inventories were 1.46 million tons and business inventories in Xinjiang (not shipped out of Xinjiang) were 1.34 million tons.

Total cotton inventories in the Yellow River Basin of Hebei province, Shandong province, Henan province together were 760,000 tons, while that in Yangtze River Basin of Jiangsu, Anhui, Hubei and Hunan province came upto 530,000 tons. Inventories scattered in other areas were 170,000 tons.

In late October, the state once again raised export tax rebate rate on textile and garment by one percent to 14 percent, but the positive effect has been negligible.

In early November, textile and apparel products were traded cautiously in Guangzhou Trade Fair due to which trade turnover shrank significantly and textile enterprises met difficulties in attracting sales and were forced to further lower lint inventories.

Cotton price continued to mark a declining trend, and as a result, textile enterprises limited their procurement to avoid risk. Ginners adopted the hand-to-mouth strategy. Nevertheless, the price of earlier procurement is higher and sales price post procurement is lower, resulting in rut situation of reverse price trend between procurement and sales. Almost, 48 percent of cotton enterprises are operating at a loss.

Fibre2fashion, News Desk - China

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