Weekly Report: Cotton Import Declined Largely due to Narrowed Price Gap Home and Abroad

International cotton price stayed at high level since the beginning of 2014, and domestic cotton price continued to decline, especially after the base price of reserve release cotton was lowered in April, and the price gap home and abroad reduced to around 2,000 Yuan per ton under 1% tariff and about 1,000 Yuan under sliding duty. The narrowed price gap and sluggish demand reduced cotton import largely. According to Customs statistics, in April China imported cotton of 224,400 ton, 2,300 ton more over the month and 47.9% down Y/Y; the average import price was 2,087 USD/ton, 25 USD up over March, 7.5% up Y/Y. The cumulative import of the first eight months of 2013/14 season was 2,109,200 ton, 33.4% down Y/Y; the first four months of 2014 imported cotton of 9,850,000 ton, 45.2% down Y/Y.
Last week (12th -16th May), most cotton grew up the third true leaf and some to the fifth true leaf. The relative low temperature impeded cotton growth in Northwest, and in inland areas the sunlight and temperature were good for seedling development, and precipitation caused damage in cotton field in South of Jianghan region earlier of the week.
The sluggish demand in domestic cotton textile market reduced lint spot price, CC Index 3128B settled at 17,427 Yuan per ton by weekend, 45 Yuan down over the week. Reserve cotton release transaction declined continually, for the week 91,900 ton cotton was sold and daily transaction was 18,000 ton, nearly 30% down over the week. By 16th May, reserve cotton release totaled 1,627,000 ton, 30.6% of the transaction percentage, including 1,524,000 ton of domestic cotton and 103,000 ton of import cotton.
As for import cotton price, FC Index settled at 95.15 cent/lb., 1.6 cent down over the week.