China Cotton Monthly Review - 24th June, 2014

According to the survey conducted by China Cotton Association, the national cotton acreage of 2014 is estimated to be 4.08 million mu, 12.6% down Y/Y. Due to weather reasons, the flowering rate is lower than the corresponding time last year, and the insect and disease incurrence is heavier. The general cotton growth condition of this year is not as good as last year. 
Domestic cotton demand kept sluggish. Affected by rumor on auction price decrease, the trade volume of reserve cotton declined largely and some mills started to dump their cotton yarn. After the announcement of No Reserve Cotton Release Policy Change Before New Cotton Arrivals published by China Cotton Association, the market was stabilized with recovering reserve trade. For the month, the reserve cotton selling totaled of 279,000 tons, 29.4% down over the month. By the end of June, reserve cotton release accomplished by 2,054,000 tons. CC Index 3128B has monthly average price of 17,371 Yuan per ton, 63 Yuan down over the month.
For June, both the domestic and foreign cotton price declined, especially the international cotton price, resulting in larger price gap with domestic price after three months narrowing. The import cotton volume in June is 218,000 tons, at average price of 2,132 USD/ton. Nationally the carryover stock of commercial cotton is 202,000 tons, 4.7% up over the month; mainly due to increase of import cotton in warehouses, though still 39.5% less than the corresponding time last year.
Textile industry continued to recover. According to National Bureau of Statistics, during January to June, yarn production was 18.47 million tons, 10.1% up Y/Y. For the first half year the export of textile and apparel increased steadily according to the Customs, export value of textile and apparel is 132.5 billion USD, 4.2% up over the year. At the same time, import cotton yarn declined and the first six months import is 988,000 tons, 2.3% up Y/Y.