Selling Cotton Reserves Will Lead To A Drop In Cotton Prices On The Cotton Market.

< p > UK website said in November 6th that the Chinese government is expected to start selling the expanded cotton reserves by the end of 2013. It is these reserves that keep domestic and international cotton prices at an abnormal high level, stimulate cotton cultivation in the international scope, and make China's "a target=" _blank "href=" //www.sjfzxm.com/ "textile" /a "enterprises fall into the predicament of shortage of raw materials.

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< p > cotton prices fell to a 10 month low. The market expects China to put a large amount of cotton reserves into the market to stabilize cotton prices.

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< p > according to the estimates of the US Department of agriculture in the summer of 2013, the reserve of China's State Reserve Bureau has reached 10 million tons of cotton reserves, accounting for 60% of the world's cotton stocks, and it has bought at a relatively high price.

In 2013, as of the end of October, China's State Reserve Bureau had acquired 1 million 80 thousand tons of cotton.

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< p > reported that the China Cotton Reserve Management Corporation recently announced that it will implement the policy of China's top economic planning department, promulgated by the national development and Reform Commission in early October 2013, < a href= "//www.sjfzxm.com/news/index_q.asp" > policy < /a >, calling for "strengthening the management of the cotton market" and "ensuring the supply of purchasing funds".

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< p > this has triggered speculation in the market that the State Reserve Bureau of China will start selling cotton stocks this month after the completion of the cotton purchase plan.

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< p > reported that the December cotton price of London Intercontinental Exchange was 75.9 pence per pound, the lowest level since January 2013.

Traders in China have been busy closing their cotton positions on the Zhengzhou Mercantile Exchange, which is expected to cause a sharp fall in domestic cotton futures prices.

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< p > reported that the purchase of cotton at the market price level by the China National Material Reserve Bureau has caused confusion in the domestic and international cotton market.

Although the Bureau has theoretically ensured that the labour intensive textile industry in China can get enough cotton supply in the country, the scale of its cotton stocks continues to rise as the textile enterprises refuse to pay for the high price cotton purchase at the cotton auction, and the board refuses to lower the price because of fear of damaging losses.

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< p > because the direct import scale of textile enterprises is restricted by quotas, many enterprises are buying imported cotton yarns instead.

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Besides P, high cotton prices have become another factor that drives Chinese textile owners to set up factories in low cost markets such as Southeast Asia.

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< p > it is reported that less than ten years ago, China's Ministry of finance was forced to apply for assistance to China's State Bureau of material reserves. It bought a "a" href= "//www.sjfzxm.com/news/index_s.asp" > cotton < /a > on the international market at a higher price and caused a loss at a low price.

It is reported that China's Ministry of finance is impatient with the state supplies and Reserves Bureau once again in trouble.

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