Weekly Report: Reserve Surpassed 2 million tons; Domestic Market Stable

Early November, cotton picking closed to the end, weather nationwide in cotton areas was fine for cotton picking, drying and processing. Seed cotton procurement price was stable, and procurement in Xinjiang comes to the end; at the same time, that process was slow in inland due to lower quality. The temporary reserve of 2012/13 season accomplished volume of more than 2 million ton, five times more than that in the same timeframe last year, and nearly 70% was Xinjiang cotton. Both domestic cotton spot and futures market was stable and international price kept declining, enlarging the price difference home and abroad.

During the middle and later stage of seed cotton procurement, the seed cotton price nationwide was stable. According to survey of CCA cotton processing industry branch, the type 328 equivalent seed cotton had weekly average procurement price of 8.53 Yuan per kilo, unchanged with last week. The procurement in Xinjiang approached to the end with less quantity, lower quality and reduced participants in the market. Inland procurement processed slow with more cautious attitude in Yangtze region with less high quality seed cotton; and procurement in Yellow River region was even more difficult with prevailingly low quality and traditionally withholding intention from farmers, where agents travelled across provinces to survive.

The daily actual trade volume of 2012/13 season remains above 50,000 ton. By 9th November, the total volume traded was 2,231,830 ton, 1,551,120 ton of Xinjiang cotton, accounting for 69.5%; and 680,710 ton in inland, accounting for 30.5%. The top three on volume of inland was Hubei, Shandong and Hebei, accounting for 7.6%, 7.3% and 4.4%. At the same time, Xinjiang PCC reserve cotton release accomplished 24,653 ton.

Last week, domestic cotton spot and futures market was stable, ZCE cotton nearby contract CF211 settled at 19,295 Yuan per ton, 50 Yuan up over the week; CNCE nearby contract MA1211 average price settled at 18,823 Yuan per ton, 22 Yuan down over the week. CC Index328 settled at 18,754 Yuan per ton, 33 Yuan up over the week.

At the same time, international cotton price declined. As for import cotton price, FC Index settled at 83.34 cent/lb by weekend, which was 13,417 Yuan per ton under 1% tariff, 5,337 Yuan lower than domestic equivalent; and 14,398 Yuan per ton under sliding duties, 4,356 Yuan lower than domestic equivalent.