Weekly Report: Cautious Purchase by Textiles with Declining Cotton Price

Recently, cotton demand by textiles reduced generally due to sluggish market and financial difficulty; at the same time reserve transaction volume, import cotton and spot market trade volume all declined, so was the price for spot and futures market.
Reserve cotton dominates the current textile raw cotton purchase, after the adjustment of reserve release arrangement earlier this month, the market responded actively at first by achieving daily transaction volume of more than 50,000 ton, and then reduced to over 30,000 ton. Last week (14th -18th April) reserve cotton released 156, 900 ton, and by 18th April, the total transaction of reserve release reached 1.18 million ton, by transaction percentage of 33.3%. As for import cotton, China imported 222,000 ton of cotton in March, 9.7% down over the month, and 58% Y/Y, which is the third monthly decline in a row.
Confined by available market resource, sales price declined further. By weekend, CC Index 3128B settled at 18,396 Yuan per ton, 119 Yuan down over the week. Survey on mills showed their tight control on raw material stock within one month due to sluggish demand and keeping the hand to mouth purchase to increase capital flow.
During the middle of April, temperature is relatively higher than normal years in Northwest and Yellow river regions, the recent rain helped seedling growth. The lasting rain and high moisture postponed the sowing process in Yangtze regions. As for import cotton price, FC Index settled at 96.73 cent/lb., 3.73 cent down over the week.