Weekly Report: New Seed Cotton Arrivals will come to Market Soon with Clarified Situation

Source:China Cotton Association  Date: 29/September/2014

On 25th September, national teleconference on cotton was held by NDRC and seven other government departments related, to analysis current cotton production and market, as well as deploy the cotton work in 2014. This year is the first year of cotton target price reform trial, with the largely changed market, reduced cotton acreage and production, enlarged demand and supply gap, revised cotton policy and transferred new system. After the closure of reserve purchase policy, the cotton price would be dominated by market power, at the same time government macro policy has settled: first, suspend reserve cotton release; second, arrange import in the reasonable manner; third, make response plan for seed cotton sales difficulty; fourth, strengthen the supervision over futures market, to build good market environment for new crop sale. CCA suggests, cotton growers should sell their crop at the right time, seed cotton buyers should buy at reasonable price, speed up capital turnover and manage the risk, and the cotton quality should be in the highlight in the trade.

Affected by the low temperature, new arrivals were postponed at large, the seed cotton buying had not started yet in most regions, and the peak time would be during the end of September and the early October. Currently, the demand and supply situation domestically is quite clear; the supportive policy is clarified, although the price is falling, cotton growers started to sell. In Xinjiang, ginners attended the policy introduction seminar to prepare for later seed cotton purchase. Last week (22nd-26th September), Xinjiang local buying price for white cotton 2128 seed cotton equivalence is 6.36 Yuan/kilo, 2% lower than last week, and the decrease rate is 12.9% less than last week. Inland white cotton 3128 equivalence is 7.1 Yuan/kilo, 0.1 Yuan down over the week. Included the new crop price, CC Index 3128B decreased largely to 15,958 Yuan/ton at 26th September, 867 Yuan down over the week.

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