Weekly Report: Procurement Price Kept Increase; Domestic Market Remain Stable

On 4th November, the 112nd Canton Fair closed. According to statistics, both the attendees and final trade value witnessed distinctive decline. The decrease from traditional market of EU, US and Japan was clear due to EU crisis, US slowdown and recent tension between China and Japan. Textile and apparel trade declined by 15.5%, and remained orders concentrated in middle or short term contracts.

1. Increased participants in procurement market with slightly increased prices

Since October, weather in most cotton regions was fine for harvest. At the beginning of November, strong cold air brought heavy rain to North areas, suspended harvest, procurement, processing and transportation there. Encouraged by weekly increased reserve target, more processing companies entered the market. According to CCA cotton processing branch, about 85% nationwide and 97% Xinjiang big-bale ginners participated in seed cotton market. Bad weather reduced quality and quantity in some inland provinces, and the high grade seed cotton in market, however, processing companies were active and speed up the procurement even across provinces.

Last week 29th October–2nd November, the cotton seed price increased in Xinjiang, and its decline also slowed down in inland, at the same time seed cotton procurement price increased moderately, type 328 equivalent seed cotton had weekly average procurement price of 8.53 Yuan per kilo, 0.02 Yuan up over the week. Xinjiang seed cotton equivalent type 329 has weekly average price of 8.68 Yuan per kilo, 0.01 Yuan up over the week; and inland type 428 equivalent was 8.25 Yuan per kilo, 0.01 Yuan up over the week.

2. Reserve trade approached 2 million, 71% of Xinjiang cotton

2012 reserve trade processed with daily transaction of more than 60,000 ton. On 29th, in implement of national cotton teleconference and support of cotton cooperatives, two new inland warehouses with capacity of 5,000 ton were included, and the daily reserve trade volume was 88,000 ton, highest of the week. By 2nd, November, reserve totaled 1,924,480 ton, including 1,378,320 ton in Xinjiang by 71.6%, and 546,160 ton in inland by 28.4%. The top three were Hubei, Shandong and Hebei, accounting for 7.4%, 6.6% and 3.9% separately. At the same time, PCC reserve release cumulated to 22,560 ton. 3. Sales price stable domestically and decrease internationally

Last week, domestic cotton spot and futures market was stable, ZCE cotton futures nearby contract CF211 settled at 19,245 Yuan per ton, 10 Yuan up over the week. CNCE nearby contract MA1211 settled at average price of 18,845 Yuan per ton, 35 Yuan up over the week. CC Index 328 settled at 18,721 Yuan per ton, 17 Yuan up over the week.

At the same time, international price decline. In consequence, FC Index settled at 84.11 cent per pound, which was 13,539 Yuan per ton under 1% tariff, 5,182 Yuan lower than domestic equivalent; and 14,490 Yuan per ton under sliding duties, 4,231 Yuan lower than domestic equivalent.