April 24, 2012

China's spot cotton prices slide, market remains stable

The cotton market of China was generally steady in the week ending April 13, with spot prices dropping a bit while the prices on the futures market recover slightly, the China Cotton Association stated in a weekly report on Wednesday (Apr 18).

Majority of China's cotton growing areas had fine weather in the first 10 days of April. Meanwhile, sound soil moisture was favourable for cotton planting, the report noted.

According to the report, the lint cotton sales remained dull as textile enterprises were not active in procurement with rising stock pressure.

The national cotton price index CCIndex 328, which indicates the average price of standard lint in China, accumulatively dropped by RMB46/tonne (US$7.29) to RMB19,400/tonne (US$3,075) last week. The most actively traded September cotton contract on the Zhengzhou Commodity Exchange edged up 0.9% to end at RMB21,380/tonne (US$3,388) last Friday.

Although the USDA's supply/demand report was negative to the cotton market, the international cotton prices still picked up slightly last week underpinned by weakening US dollar. The import cotton prices were RMB2,477-2,960/tonne (US$393-$469) lower than the domestic prices.