CNCotton: As time approaching the deadline for all bank loans, cotton enterprises in Fugou, Henan province are in a dilemma at present.
Insiders pointed out that although the enterprises have signed loan contracts with banks, so far only one enterprise is willing to sell cotton at this low price as the cotton being held are of highest quality. Procurement cost and storage fees have pushed the cotton value up above 14,500 yuan per ton. This compares to a prevailing cash price of 13,900 RMB/ton. With no less than 4,000 tons available at stocks, cotton enterprises are experiencing the toughest moment and taking the pain for a turn of the market trend.
As a result, seed cotton price has fallen from 5.6 RMB/kg to 5.2 RMB/kg. Smaller ginners are taking the opportunity to increase procurement at a lower price level as farmers are in a hurry to liquidate stocks before wheat harvest. By the end of May, cotton procurement is virtually completed in this county.
