CNCotton: Domestic cotton prices are firming up since June as the imported cotton gradually exhausted. Despite this, in an effort to avoid any risk in the near future, cotton enterprises in Jiuquan, Gansu province have been taking chance to liquidate some stocks.
It is reported that many cotton enterprises have set up distribution channels in other provinces. This encouraged cotton sales and provided some stability in prices. Grades of T129, T229 and T328 are quoted at 14,500-13,900 RMB/ton, some 200 RMB higher than the quotes in other provinces. Some big enterprises are still holding stocks as large as 10,000 tons or above, which represents at least half of the procurement. One of them stated that even if the price goes higher, they are still in a terrible hurry to liquidate stocks, otherwise the new crop procurement would be a major problem.
Textile mills, at the same time, may continue to purchase in a piece meal pattern as they are facing many difficulties. Therefore, domestic cotton price would hold basically stable and offers a good chance to push for sales. According to a survey, the market share for imported cotton, Xinjiang crop and other local crops are 20%, 50% and 30%. It has been noted that the use of imported cotton is decreasing and due to financial problems, 60-80% of the business was done by bank's acceptance.
