Weekly Report: Policy Expectations Affect Market Trend; Spot Market Price was Stable

Temporary state cotton reserve of 2013/14 season will close by the end of March, and current domestic cotton spot price was stable. Expectations on policy change will be the main factor affecting the market trend in the coming months before the new seasonal arrival. Issues on reserve cotton, import cotton and price policy, how to meet textile demand and stabilize cotton market are the most debated issues amongst industry. The outlook for this season is positive compared with the past one, both on demand and government policy, which is still under study and planned for announcement before large scale spring sowing.
Last week(24th/28th February), reserve cotton auction still dominated cotton sale, the domestic cotton price CC Index 3128B settled at 19,466 Yuan per ton, 8 Yuan up over the week. As for seed cotton buying, Yellow River region was the only place with such activity. According to survey by China Cotton Association Cotton Processing Branch, the weekly average buying price for seed cotton equivalent of 3128 in Hebei province was 8.4 Yuan per kilo, 0.03 Yuan up over the week; that in Shandong was 8.45 Yuan per kilo, 0.03 Yuan down over the week; that in Henan was 8.7 Yuan, 0.01 Yuan up over the week.
State cotton reserve purchased cotton of 132,480 ton for last week, 62,260 ton less, including 51,600 ton from Xinjiang, 80,880 ton from inland. By 28th February, reserve auction in 2013/14 season totaled 5,943,000 million ton, among which 17,500 ton was canceled due to fraud cotton involved; therefore, the actual transaction was 5,926,000 ton, including 3,928,000 ton from Xinjiang warehouse and 1,998,000 ton from inland warehouse. Reserve release for this week offered 136,700 ton for auction, 47,500 ton was sold finally and the transaction percentage was 34.8%. By 28th February, reserve cotton release totaled 595,000 ton, at transaction percentage of 36.4%.
As for import cotton, FC Index settled at 97.41 cent/lb., 0.6 cent up over the week.