How Does China Announce The Price Of Cotton In The Reserve?

Last week, the trend of international cotton prices was strong. China's purchasing and storage provided support for China and international market prices. However, the lack of substantive progress in Sino US negotiations and the reduction in China's cotton consumption both were unfavourable.

Judging from the recent four weeks, ICE futures have basically not changed and prices have not risen. The Sino US agreement expected by the market is far from being happening. China's purchase of US agricultural products is not positive, and cotton may not be part of the agreement.

China's large purchase of Brazil cotton is the main reason why cotton prices have not dropped sharply with the global cotton production and textile and clothing trade.

After many years, China began to rebuild its reserve cotton stocks and plan to enter 500 thousand tons of high-grade Xinjiang cotton, which provided strong support for the current Chinese spot price. However, at present, China's domestic clothing consumption is declining, and garment export is decreasing, so the demand of downstream enterprises is hard to revive.

On the other hand, China's acquisition may mean that it will not enter into an agreement with the US in the near future to increase imports to the US cotton market.