China Focus: Latest insight on the cotton and wool markets

摘要

On April 1, Beijing introduced measures aimed at boosting sales of its huge state reserves of cotton, believed to total in excess of 10 million tonnes, or the equivalent of around one and half years of domestic consumption. The first measure is a reduction of the opening price at auction from 18,000 to 17,250 yuan per tonne (say 132 to 126 US cents per lb). The second is the implementation of a 3:1 reward system, whereby a mill purchasing 3 bales of Xinjiang cotton from the reserve, can buy 1 bale of imported cotton from the reserve (reserve stocks of imported cotton are typically preferred by mills on quality grounds).