China Cotton Market Daily(5 May 2011)

CCF Price
•5/5 CCF RMB price for type 329: 27825yuan/mt, -345yuan/mt
•5/4 Cotlook A: 174.70cent/lb, +1.60cent/lb

International cotton market
Most ICE cotton futures contracts fell Wednesday as US dollar strengthened and Morgan Stanley were bearish with sugar, natural gas, cotton and coffee. Cotton futures for May delivery closed 6.02cents lower to 173.19cent/lb while the Jul contract dropped 6.00cents to 151.51cent/lb.

China cotton
With Shandong Weiqiao adjusting down its cotton purchasing price for consecutive two days, the panic sentiment on spot cotton market spread further, particularly among small cotton enterprises. Big cotton enterprise also lowered their offers. For example, one big cotton enterprise offered its type 428 lower at 23700-24000yuan/mt, ex-Hubei province. Offers for higher-grade ones were a little mixed. Taking Xinjiang type 329 (factory inspection) for example, lower offers were at 27000-28000yuan/mt in Zhejiang. Only a few cotton enterprises insisted on offering at 28000-29000yuan/mt.

ZCE cotton futures price dived today. The most active Sep contract closed at 24640yuan/mt, down 1190yuan/mt.

Imported cotton
CIF offers for foreign cotton dropped greatly today. The offers for 2010/11 US, Australian and Brazil crops mostly fell 5-6cent/lb while that for 2011/12 crops dropped 2.5-2.75cent/lb. Offers for southern hemisphere crops received more attention recently. Brazil M 1-1/8 was mostly offered at 162-165cent/lb, for Aug-Sep shipment, equal to 27100-27700yuan/mt under sliding scale duty.

Offers for Customs clearance cotton continued to soften. Many cotton enterprises have stopped offering in face of thin trade and low buy interest.

($1=CNY6.50)