China: High reserves, production, lower demand stabilizes cotton prices

Natural Fibers

China: High reserves, production, lower demand stabilizes cotton prices

Higher cotton production during the cotton season of 2012/13, from August 31, 2012 to September 1, 2013, and relatively low demand has kept state reserves at high levels, according to China Cotton Association’s Monthly Report. This resulted in stabilizing the domestic prices. According to actual Xinjiang cotton reserve trade and mechanical testing quantity, CCA adjusted national cotton production of 2012/13 season to 7.73 million tons, 6.2% higher than its previous year statistics.

Domestically, reserve purchase supported the cotton price, and CC Index328 had average price of 19,136 Yuan per ton, 0.1% up over the corresponding time last year. Over the same time period, international cotton price kept drifting downward, and average price gap between domestic and international prices was 4,000 Yuan per ton. With certain undelivered reserve sold cotton, the national commercial cotton carryover stock was 660,000 tons.

Cotton imports continue

Imports remain high, despite a large price gap in the local and international prices. As much as 4.4 million tons of foreign cotton was imported during this season, 19% less over last season though still high. According to Customs statistics, 280,000 tons of foreign cotton was imported, 18.3% less compared to the previous month, and 9.7% lower than last August.

In September, China Cotton Association held National Cotton Situation Analysis Conference in Beijing, participants from government; industry organizations and cotton related companies discussed cotton market in 2012/13 season and projected reduced production, stable demand and policy dominated market in the new cotton season

Yarn production, imports up

China’s yarn production in 2012-13 was 31.77 million tons, 1.8% up over the corresponding period last year. However, growth slowed down by as much as 10%. According to National Bureau of Statistics, in August yarn production was 2.94 million tons, 1.1% up over the month, and 2.8% higher than last August. Yarn imports increased significantly to 1.94 million tons, 48% more than last season.

T&C exports recovering

China’s exports of textiles and apparel showed signs of recovery, growing 11.8% to US$ 5.9 billion, in the period under consideration.