China May Raise Cotton Quota, Sell Stockpiles, Analyst Says (07/13/2010)

Updated: 2010/7/13 9:59:00

China, the largest cotton user, may raise its import quota for the natural fiber as it sells more from government stockpiles to quench a supply shortfall, an industry analyst said.

The country may import an additional 1 million metric tons and sell 600,000 tons from government stockpiles before the new crop enters the market in August and September, Dong Shuzhi, assistant manager at Jinshi Futures Co., said today.

China´s cotton supply remains tight and domestic supply seems insufficient to satisfy demand from rising consumption, Dong said.

China´s cotton consumption is estimated at 10.34 million tons in 2009-2010 season, while production fell to 7.1 million tons in the same period, according to the U.S. Department of Agriculture. Delayed planting this spring also poses a threat to output in 2010-2011, he said.

Cotton-yarn prices have risen faster than cotton this year, increasing demand for the raw material and boosting profits for textile mills, Dong said.

China will need another 2.7 million tons of cotton in the three months between July and September, consuming 900,000 tons a month, he said.

Planting delays due to cold weather in Xinjiang, China´s biggest prod6ucer, may slow the availability of the new crop, Dong said. Nationwide harvesting may be delayed until October, up to 20 days later than normal, Dong said.

The government is working on relevant policies to satisfy the textile industry´s demand and to ensure stability in the market, the China Cotton Association said today in a statement on its website, without elaborating.

Source: China Textile Leader

Authority in Charge: China National Textile and Apparel Council (CNTAC)

Sponsor :China Textile Information Center (CTIC)

ISSN 1003-3025 CN11-1714/TS