China Cotton Monthly Review - November, 2013

During the month of November, seed cotton picking was generally completed nationwide. China Cotton Association adjusted national cotton output of 2013 to 6.77 million ton, less than last estimate. Large contract expedited reserve purchase, which surpassed 3 million ton. At the same time, more bales disqualified from reserve purchase were removed from reserve stock once verified. By the end of the month, reserve release started at 18,000 Yuan per ton for standard type, which dominated domestic cotton buying. According to CCA, by the end of November, 77.7% of seasonal yield was sold nationwide, 5% slower than the corresponding time last year, 99% of Xinjiang seed cotton was sold, nearly 80% in Yangtze regions and less than half in Yellow River. The seed cotton buying price decreased slight over last month, while still higher than last November. 
By the end of October, China Cotton Association published cotton company name list qualified for large contract transaction, and also the gins and warehouses qualified. During the month, 1.98 million ton of cotton was sold to reserve, doubled the volume of October, 16.8% more than last November, and more than 40% was via large contract. By the end of November, reserve purchase of 2013/14 season totaled 3.06 million ton, 16% down Y/Y, with 77% of Xinjiang cotton.
By the end of November, 185 batch of cotton from 107 ginners were removed from reserve for quality reasons.
On 28th November, reserve release started for 2013/14 season. For the month 48,800 ton was offered on auction, and 26,800 ton was sold at last with transaction percentage of 55%.
Domestic spot market shrank further. CC Index 3128B had monthly average price of 19,603 Yuan per ton, 0.4% up over the month. During the same time, import volume increased largely because that price gap between home and abroad enlarged, import quotas of this year approached expiration. According to Customs, in November, China imported cotton of 173,000 ton, 22.6% up over the month, while 43% down Y/Y.  
In the current hand-to-mouth purchase of raw materials, commercial cotton carryover stock reduced to 330,000 ton, 32.9% down over the month, and 12.8% down Y/Y.
Cotton demand from downstream was limited, during the month raw material purchase and stock reduced over last month, product output kept increasing with more sales and declined price, finished product stock also reduced. According to National Bureau of Statistics, yarn output in November was 3.43 million ton, 5.1% up over the month, 7.2% more Y/Y. according to Customs, textile and apparel export in November valued 24.5 billion USD, 1.6% up over the month, 16.6% more Y/Y.