Beijing, CNCotton: Based on an incomplete statistic, by the end of March 2006, cumulative lint cotton procurement reached 1.8 mil tons. However, over half of the amount has yet to be sold. While the movement dominates much of the discussion, the main reason arises from a slow response to the ever-changing market environment.
Xinjiang crop, known for its superior quality in China, has a major advantage in Chinese cotton market. The fast development of textile industry has been keeping cotton undersupplied. Cotton traders in Xinjiang, who are never troubled by the marketing of Xinjiang crop, have been battling for every bale of Xinjiang cotton every season at any cost.
In 2006, the situation all changed when the issuance of import quota came at an earlier date and spinners choose to buy foreign descriptions. Merchants dealing Xinjiang crop are forced to make aggressive offers (as low as 14000 yuan per ton). Despite this, the imported cotton still dominates the physical offtake. Xinjiang crop is clearly facing great challenges as imported cotton flooding into domestic market.
Statistics show that Chinese imported 1.12 mil tons of cotton in the first quarter of 2006, of which more than 50,000 tons imported via Xinjiang. If Xinjiang crop price remains high, the sale will become increasingly tough in the near future.
