Weekly Report: Policy Changes Gathering Attention; Import Volume Rise Again

After reserve release completion, situation of raw material inventory differs a lot among large and small mills; the former bought enough reserve cotton with their capital and can support the production to October, while the latter had resource lasting less than one month. Currently, policy changes such as reserve purchase detail for the new season, reserve quality value difference, time and price of reserve release in the new season were gathering attention from all sides. At the same time downstream textile consumption witnessed little improvement and cotton demand remained weak, spot price continued to slip. On 16th August, CC Index328 settled at 19,189 Yuan per ton, 12 Yuan down over the week; ZCE cotton futures nearby contract settled at 21,180 Yuan per ton, 280 Yuan up over the week. 
Last week (12th/16th August), cotton nationwide was in bloom period, some boll started to open and some early ones were picked by growers. Temperature in Xibei, Huabei and Huanghuai regions was higher than corresponding time of normal years, the abundant sunlight and fine soil moisture are good for cotton growth, and precipitation in some areas of Hebei, Shandong was more than normal years which was negative for flowering, boll bearing, insect and disease prevention. Insufficient rain and high temperature in southern of Huanghuai region caused early drought. And continued high temperature in Yangtze region dropped some flowers and bolls on the plants. Later on, precipitation in south of Jiangnan eased the drought. 
According to Customs, in July China import cotton of 337,800 ton, 25% up over the month, and 16.8% less than last July; the average import price continued to increase to 2,190 USD/ton, 1.4% up over June, and 8.4% less Y/Y. The cumulative import volume for the first eleven months of 2012/13 season was 4.12 million ton, 19.8% less Y/Y; and the total import from January to July in 2013 was 2.75 million ton, 20.6% less Y/Y.
As for import cotton, FC Index settled at 99.27 cent/lb.by weekend, 0.02 cent down over the week.