Cotton Prices In China Are High Due To Tight Supply

On Tuesday, the state owned assets supervision and Administration Commission said in a statement that China's cotton prices were high because of tight supply, bad weather, textile mills replenishing inventory and cotton pests and diseases.
On Thursday, the Zhengzhou Mercantile Exchange benchmark cotton contract in September set a record high of 18340 yuan / ton, increasing by more than 1000 yuan in two weeks, although this week the price dropped.

The committee said that the MA1007 contract price of China's national cotton exchange in Beijing also hit a record high price of 18780 yuan / ton last week.

In order to prevent the shortage of cotton, this is very important for Chinese textile manufacturers. Besides the existing import quota, the national development and Reform Commission will approve about 1 million 100 thousand tons of cotton import quota, so the total import volume in 2009-10 years will exceed 3 million tons.

China approved 1 million 890 thousand tons of import quota in 2009.

Because of the bad weather at the beginning of this year, tight supply of goods stimulated cotton prices to rise.

State owned assets supervision and Administration Commission's statement said that low temperature is not conducive to sowing in spring, Xinjiang suffered rain and snow weather, affecting cotton transport. Xinjiang is a major cotton producing province.

The statement said that the humidity in the Yangtze River affected the emergence of cotton, so the transplanting time was postponed for 7-10 days.

Cotton prices are rising, and the price of cotton instead of raw materials is decreasing. Therefore, cotton demand may become a problem in the coming months.

Due to increased imports of cotton, many companies can keep their stocks up to September.

However, the shortage of insects has led to a more serious shortage of cotton.

The statement said aphids damaged part of the cotton field, and some cotton fields need to be replanted.

On Tuesday, the Zhengzhou exchange's benchmark September contract fell 1.63% to 17845 yuan / ton, but experts said it was mainly a technological retreat after the rally last week.