July 31, 2012

China's cotton stock policy to rule in 2012/13

The policy of China on buying huge amounts of cotton and piling it in state reserves will dictate cotton market prices in the 2012/13 marketing season beginning August 1, the chief executive of Allenberg Cotton Co. said Friday (July 27).

Allenberg Cotton Co. president and CEO Joe Nicosia told the Ag Market network's annual radio program from New York that "everything (in the cotton market) is dependent on the Chinese reserve policy."

He said high corn and soy prices would lead to switching by American farmers in 2013 to grains and away from cotton.

He added the current cotton contract on ICE Futures US will remain the world's flagship cotton contract and a new world cotton contract would face difficulties taking off.