Weekly Report: PCC Cotton Auction had Poor Sale; Domestic Reserve Cotton Release Recovered

On 5th August, Xinjiang’ Production and Construction Corps (PCC) cotton auction started, however, the poor cotton quality resulted in low transaction rate. By 8th August, PCC cotton auction had offered 12,322 tons of cotton, and only 708 tons was sold, which is 5.7% of the total offer. This batch of PCC cotton is mainly the machine picked cotton with length between 26.60 mm and 26.75 mm, white cotton grade 3 accounting for 60%-70%, which could only be used for C21 yarns if not for cotton allocation; the domestic C21 yarns have no competitiveness compared with foreign C21yarn, which impeded mills from buying.
As domestic reserve cotton release will close soon, the transaction recovered to 61,200 tons, 3% up over the week. By 8th August, the total reserve cotton release had been 2,397,100 tons, 21.07% of the transaction percentage, including 2,250,600 tons of domestic cotton and 146,500 tons of import cotton.
During last week (4th-8th August), cotton nationwide was in flowering stage, and some cotton plants in Xinjiang had opened bolls. The rain in Northwest and Yellow river region eased drought there, and the fine weather in the South is also good for flowering and boll bearing. Domestic lint market kept the weak trend, cotton yarn price moved downward. By 8th August, CC Index 3128B settled at 17,115 Yuan per ton 23 Yuan down over the week.
As for foreign cotton price, FC Index settled at 72.15 cent/lb., 0.09 cent down over the week.