Chinese Market Stable as Reserve Starts Selling

By Jim.Robinson|September 12, 2012

According to the China National Cotton Information Center (CNCIC), as of September 7, about 3.5% of the new cotton crop has been harvested, 0.9% ahead of this time last year and 1 point behind the four-year average. Nationwide, 23.4% of the crop has been sold, 7.3% ahead of last year and 11.9% ahead of the four year average. None of the new crop has been processed by gins, however, 0.3% behind last year’s pace and 0.7% behind the four-year average.

China also started selling cotton from its strategic reserve this week. Spinners were active in the auction, although prices traded in a fairly narrow range. In recent days, the market has been stable, with spot prices up slightly and futures on the Zhengzhou Commodity Exchange (ZCE) down slightly.

As of September 7, the CNCotton B Index for standard lint cotton in the eastern provinces was $3,074 per ton, an increase of $14.26 per ton (0.5%) over last week. That price reflects a decrease by $133.44 per ton (4.2%) from this time last year.

The average price of standard lint cotton in Xinjiang was $3,108 per ton, an increase of $21.97 per ton (0.7%) from last week and a decrease of $186 per ton (5.6%) from last year. The settling price of ZCE cotton futures contract for September 2012 was $3,060 per ton, a decrease by $9.90 per ton (0.3%) from last week and a decline of $231.97 per ton (7.1%) from last year.