China Sells State Reserve Cotton To Lower Cotton Prices In International Market

< p > China is going to sell huge "a href=" //www.sjfzxm.com/ "national reserve cotton < /a" from November 28, 2013.

The move is expected in the market and has begun to lower the price of cotton in the international market.

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Less than P. After three years of massive buying, which supports the price of cotton in the international market, China's state reserve cotton is now about 10 million tons, which accounts for half of the world's total reserves.

China National Cotton Reserve Corp, China's cotton reserves, is in a dilemma because any effort to reduce reserves is likely to further reduce cotton prices and lead to huge losses.

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"P > China's cotton < a href=" //www.sjfzxm.com/news/index_q.asp "> trading market < /a > (China National Cotton Exchange) announced yesterday that the auction will surely be closely watched by the market.

Investors will be looking for clues to judge the fate of the huge reserve cotton stocks in the central storage cotton warehouse.

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In recent months, the spot price of cotton on the Intercontinental Exchange (ICE) has been steadily falling due to the expectation that China will sell the national reserve cotton in recent months.

ICE cotton prices fell 1.5% from March to yesterday, to 77.76 cents per pound.

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< p > industry executives said the bottom price of today's auction may be set at 18 thousand yuan per ton (equivalent to 1.34 US dollars per pound), which is much lower than the cotton purchase price of 20 thousand and 400 yuan per ton in the acquisition season.

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Ron P Lawson Advisors Ron Advisors said the auction notice did not mention additional cotton import quotas.

Unless the Chinese government changes cotton import policy, the auction will give foreign cotton mills advantages over China's cotton mills.

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"P," he said, "international cotton prices are cheaper.

If you can buy a Ferrari (Ferrari) for 85 thousand dollars, why spend 100 thousand dollars to buy a Chevrolet Corvette? "/p".

< p > to stabilize the supply of cotton and ease the cotton farmers in the turbulent areas of Xinjiang, China set up the lowest cotton purchase price from 2011 and began to store cotton.

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The unexpected consequence of this p policy is that many textile factories in China have abandoned the raw materials of China and imported cotton yarn in despair.

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< p > in October of this year, the National Development and Reform Commission finally stepped in and started to solve this dilemma, prompting the market to have the expectation that China will reduce reserve cotton.

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"Investors are trying to figure out how China will digest cotton reserves," said Fred Gale, a senior economist at Department of Agriculture in Washington, P. "Fred," said Department.

At present, China does not have a clear strategy. "

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< p > industry executives said that the amount of cotton sold in China today will depend on cotton's < a href= "//www.sjfzxm.com/news/index_s.asp" > Quality /a > and the textile mills' willingness to purchase those "old" cotton that have been stored for more than a year.

In addition, the auction rule also limits the amount of cotton purchased by a single textile mill in order to prevent anyone from hoarding cotton and selling it again in the future.

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