June 28, 2012

China's foreign cotton supplies hit highest level

The imported cotton stocks of China have reached its highest level at the country's biggest port for cotton even in the occurrence of falling prices and low demand from the downstream textile sector.

According to a report from the inventory of imported cotton in the Huangdao port in Qingdao, located in the Shandong Province, reached over 700,000 tonnes.

Furthermore, it said that the inventory level has surged nearly two-folds from April, while the cotton stockpile of the previous year has not been sold yet. The cotton traders are facing losses of at least RMB3,000 (US$471) per tonne due to the falling prices, said the report.

Meanwhile, the Global Times quoted Guo Jianying, an agriculture analyst with Guan Tong Futures Brokerage, saying that in March 2011 the price of cotton had reached a record high of over RMB30,000 (US$4,713) per tonne.

The price of cotton is currently trading in range of RMB18,000-19,000 (US$2,830-$2,988) per tonne, significantly lower than the record high of RMB30,000 (US$4,713) per tonne in March 2011.

"The price of imported cotton is on average RMB3,000-5,000 (US$471-$786) cheaper than the domestic price, which is why imported cotton is stockpiled," the Xinhua quoted Zhang Wenmin, general manager of the Cotton Business Unit with Zhengzhou-based Wonder Futures as saying.