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China:Cotton prices subdued |
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2005-1-25
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It’s the bumper cotton harvest that is pulling down prices besides temporary cash shortages among spinning mills and exports in a flux, says veteran market observer.
Year 2004 saw the nation reap a record 6.32 million tons of cotton, which was 4.86 million in the year 2003.
Commenting on the cotton prices Gao Fang, secretary-general of China Cotton Association (CCA) said, "Prices will continue lingering around at a low level before the domestic growing season comes in April."
Chinese cotton information portal CNCotton.com mentioned the cotton price of spot transactions at 11,887 yuan (US$1,437) per ton on Friday, which touched a high at 13,900 yuan (US$1,680) before the harvest in August of last year. The peak was 18,000 yuan (US$2,176) earlier last year.
Cotton spinners and textile producers say they are running out of money due to credit tightening placed by the central government in May, aimed at cooling down the blistering economy.
Following the uncertainties, current year''s textile exports will also be affected due to lackluster response of cotton consumers to stock cotton.
Further, domestic producers expect sanction in the face of the global threat perception that Chinese apparel and textile will flood the international markets.
New limits for imports and antidumping measures have been already put in place for certain textile products by the United States and Turkey, and more can be expected.
Referring to cotton imports, Gao said China still needs to import at least 1.4 million tons this year despite the domestic harvest.
"Judging from the normal growth of China''s textile industry, demand of cotton will be about 7.7 million tons or higher in 2005," she said.
It is learnt that the current year''s 890,000 tons cotton imports quota, in addition to previous years balance 500,000 tons, will brave the anticipated shortage. |
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