October 25, 2012

China acquires one million tonnes of cotton

China's National Cotton Reserves Corporation has began acquiring and stocking up one million tonnes of cotton on Sept. 8, 2012, which was 150 times the amount purchased in 2011.

Qingdao Hongchuan Logistics Co. Ltd. disclosed purchase price of new cotton for storage is CNY20,400 (US$3,265) per tonne this year, which will be effective till March 2013.

China National Cotton Reserves disclosed it is the second year of purchasing cotton for storage, which guarantees cotton planters with basic profits and steadies cotton price in China. After launching the purchase plan, average price of seed cotton is settled at around CNY8.4 (US$1.34) per kilogramme, reflecting price of ginned cotton increased by nearly 3%. Price of domestic 328-grade ginned cotton stepped up to CNY18,788 (US$3,003) per tonne on October 18. Zhengzhou cotton futures contract price increased by nearly 4%.

Galaxy Futures reported on October 17 that China National Cotton Reserves has signed major contracts with China National Cotton Group Corporation (CNCGC) and Cotton and Linen Corporation of Xinjiang Production and Construction Group by now, with intention to purchase 300,000 and 600,000 tonnes of cotton respectively from the latter two.