February 15, 2012

China's cotton prices continue with steady hike last week

In the week ending February 10, spot cotton prices in China kept increasing, the China Cotton Association said in a weekly report on Tuesday (Feb 14).

The national cotton price index CCIndex 328, which indicates the average price of standard lint in China, accumulatively increased RMB119/tonne (US$18.9) to RMB19,472/tonne (US$3,092.27) last week.

Processing mills in some cotton producing areas started to purchase unginned cotton from farmers after the Lantern Festival (February 6) and the unginned cotton market was buoyant as many farmers were active in selling.

The ongoing state purchase and reserve programme also underpinned cotton prices, the report noted. The state stockpiler China National Cotton Reserves Corp. began the cotton stockpiling programme on September 8, 2011 after market prices fell below the protective price of RMB19,800/tonne (US$3,144.35) for five straight working days.

By February 10, China had purchased 2.52 million tonnes of new cotton for state reserves.

Weighed down by sluggish consumption, the international cotton prices extended the decline last week, and were RMB2,079-2,558/tonne (US$330.16-$406.23) lower than the domestic prices, according to the report.