China’s Cotton Reserve Sales May Extend To September

Market News

China’s Cotton Reserve Sales May Extend To September

According to market reports, China could be extending the sale of reserve cotton by one month till September, following the industry’s demand for more cotton.

China's mills have been urging the government to release more cotton from state reserves, as fewer quotas for low-tariff imports and higher demand for local yarn tighten supplies. Greater dependence on reserves at the world's top importer could dent a rally in global cotton futures that hit a two-year high this month. But in the long term, it could be bullish for prices as China runs down its massive stockpiles.

Already, 1.57 million tonnes have been sold via auctions, nearly 100% of the volumes offered since sales started in May were sold out, but traders say more was needed to meet an annual demand of 7 million tonnes given output and imports are on the wane.