Cotton prices did not further increase in China in the past week.
Average 328 grade only gained 11 yuan per ton or 0.09%, reflecting a rise to 12,039 yuan on Friday before the main indicator in China retreated to 12,036 yuan on Monday.
Prices last week even declined on CNCE (China National Cotton Exchange) where average price for delivery in March was down 105 yuan or 0.80% to 13,090 yuan per ton.
Cotton futures further increased in Zhengzhou, however, rising between 25 and 80 yuan per ton.
Prices are expected reaching higher levels in the coming period, in line with stronger demand at home.
Although more cotton was bought before lunar year holidays, stocks are very low at textile mills.
A lack of cash is partly explaining the situation. Demand for cotton could surge in the coming weeks as prices are no more expected falling on the international market.
Although production soared in the current season, China is not able covering its needs. Imports are therefore expected increasing in March and April since the largest part of the domestic crop has already been purchased.
China's demand could further boost cotton futures in New York with domestic prices therefore stimulated by the US rally, on their turn.
As a clear sign that imports will rise, authorities are expected releasing an additional import quota of between 500,000 and 1 million tons.
