July 27, 2012

China's 2012 cotton yield may fall 9.1% on-year 

The cotton harvest of China is seen at 6.86 million tonnes for 2012, 9.1% lower against the past year due to a 9.6% decline in acreage, cotton sector website CNCotton reported.

China will likely start buying domestic cotton for state reserves when new-crop cotton hits the market in end-September, it quoted Hou Zhenwu, vice general manager of China National Cotton Reserves Corp, as saying.

The nation may buy more cotton for state reserves next season than this year, Hou said in the report dated July 19. CNCotton is owned by CNCRC.

China stockpiled 3.13 million tonnes for state reserves in the 2011-12 season, buying at RMB19,800 a tonne (US$3,126). The government will pay farmers RMB20,400/tonne (US$3,193) this year.

September cotton futures on the Zhengzhou Commodity Exchange settled at RMB18,760/tonne (US$2,936).

Consumption is sluggish as demand for textile products from the US and Europe is weak, Hou said, adding that the situation is unlikely to change in the short term.