Weekly Report: Cotton of Grade Five Included in Reserve Purchase; Seed Cotton Price Went Downward while Lint Upward

Based on Cotton Temporary Reserve Approach of 2012/13 Season, government department related decided that since 19th November, in five regions namely, Binzhou, Dongying in Shandong province, Cangzhou, Hengshui in Hebei province, and Jinghai in Tianjin, cotton of grade 5 could be traded via big-bale ginners within these five regions to reserve, and the premium against grade 3 is set to be 13%, at 17,544 Yuan per ton.

1. Seed cotton available in low quality, procurement price declined slightly
Seed cotton quality reduced distinctively in grade, micronaire, ginning outturn as time went on. Grade four cotton accounts for 50-60% in Xinjiang, and 70-80% in Inland.
Cotton seed price in inland continued to decline, and in worrying that decline would drive seed cotton price downward, many growers were more eager to sell their seed cotton. According to CCA cotton processing industry branch, last week, 12th-16th November, seed cotton procurement price nationwide declined, type 328 had weekly average procurement price of 8.48 Yuan per kilo, 0.05 Yuan lower over the week. In Xinjiang, type 329 had weekly average price of 8.62 Yuan per kilo, 0.07 Yuan lower over the week; Inland type 428 was 8.20 Yuan per kilo, 0.05 Yuan lower over the week.

2. Reserve trade volume reached 2.85 million ton
On 12th, 16th November, reserve purchased from key cotton companies of 361,040 ton. By 16th November, reserve trade has accomplished of 2,851,130 ton, including 1,671,92 ton in Xinjiang and 818,170 ton in inland. Except key companies, the biggest share is Xinjiang, accounting for 67%, and top three of inland are Hubei, Shandong, and Hebei provinces, taking total share of 8.2%, 7.8% and 4.7%. During this time, reserve cotton of last season in Xinjiang PCC has sold out of 26,545 ton.

3. Cotton price rose domestically and internationally
Last week, domestic cotton spot and futures markets experienced moderate increase. ZCE cotton futures nearby contract CF301 settled at 19,610 Yuan per ton, 85 Yuan up over the week; CNCE nearby contract MA1211 average price was 18,839 Yuan per ton, 16 Yuan up over the week. CC Index328 settled at 18,788 Yuan per ton, 34 Yuan up over the week.
At the same time, FC Index settled at 84.32 cent per pound, which was 13,572 Yuan per ton under 1% tariff, 5,216 Yuan lower than domestic equivalent; and 14,512 Yuan per ton under sliding duties, 4,276 Yuan lower than domestic equivalent.