November 9, 2012

China's Henan province has commenced the Zhengzhou Cotton Trading Market, its largest electronic trading platform, for spot cotton, which is expected to become a weathervane of national cotton prices in the future.

The platform is targeted to see an annual trading volume of three million tonnes in five years.

The operation of the electronic market would change the traditional trading mode and help promote spot cotton trading in central China, said Li Jin, chairman of the new trading market.

Currently, Henan has about 1,400 textile companies and consumes up to 2.6 million tonnes of cotton per year, or 25% of the country's total. However, more than 80% of its cotton demand comes from Northwest China's Xinjiang Uighur Autonomous Region, the biggest cotton production base in China.

For a long time, textile companies in the province have faced difficulties in cotton procurement for lack of supply information.

The establishment of the trading market would make Zhengzhou the best destination for the selling of Xinjiang cotton and would also relieve textile enterprises' logistics burden, noted Li Xiuming, secretary general of the Henan Textile Industry Information Association.

To date, more than 200 enterprises across the nation have signed agreements for trading on the market.