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USDA Cotton: World Markets and Trade


13 July 2015

USDA Cotton: World Markets and Trade - 13 July 2015USDA Cotton: World Markets and Trade - 13 July 2015


USDA Cotton: World Markets and Trade Reports

China Begins Sales from State Reserves

China’s National Development and Reform Commission has announced that sales from China’s State Reserve are scheduled to begin on July 10. Up to 4.6 million bales (1 million MT) will be offered for sale through an auction process similar to the previous two seasons. The latest reports indicate that 330,000 MT of 2011 crop will be offered at a floor price of 13,200 RMB/MT ($0.97/lb.) and 470,000 MT of 2012 crop at 14,200 RMB/MT ($1.03/lb.). In addition, 200,000 MT of imported cotton held by the State Reserve will be offered at a floor price of 15,500 RMB/MT ($1.13/lb.). The cotton offered for sale will be re-classed and the minimum price for each lot offered will be adjusted based on published premiums and discounts. Sales are expected to continue through August, as in the previous two seasons.

The currently announced sale volume remains small compared to available estimated reserves and previous years’ sales. Because the announced floor prices are very close to current internal prices and because significant quantities of current crop cotton remain available on the market, even that small amount may not fully sell. Additionally, up to 40 percent of reserves sold may be replaced by future purchases by the reserve. For all of these reasons, China’s reserves of cotton are expected to remain very large, despite new auctions.

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