January 3, 2012

With the middle and high-grade cotton supplies falling along with the ongoing state stockpiling programme, China's cotton prices continued a steady rise last week (Dec 19-23).

Meanwhile, unginned cotton purchase prices began to pick up boosted by robust buying before holidays.

In the crop year of 2011-12, majority of middle and high-grade cotton has entered the state reserves and textile enterprises have low levels of cotton stocks. Lint processing enterprises generally raised prices of high-class cotton last week backed by decreasing supply on the market.

The national cotton price index CCIndex 328, which indicates the average price of standard lint in China, accumulatively increased RMB69 (US$11)/tonne to RMB19,136 (US$3,020)/tonne in the week ending December 23.

Last week, the state cotton purchase volume continued to drop from a week earlier. By last Friday (Dec 30), the state stockpiler had purchased a total of 1.83 million tonnes of cotton since the cotton purchase and reserve programme started in September.