The China Cotton Association (CCA), which lobbies the Chinese Government on behalf of domestic cotton farmers and processors, recently told investors that supplies were sufficient and the government plans to allow more imports in the near future. The CCA comments followed a rally that has driven domestic cotton futures up by nearly 18 per cent since early April.
"There is no shortage of supplies," an international news agency reported quoting a statement posted on the association’s website.Volatile fluctuations in prices had led to a tense market, despite the ‘absence of significant changes in market supply and demand,’ the association said.
There is limited room for growth despite the demand for cotton steadily rising this year, CCA said. "The supply of cotton is basically sufficient, and the abnormal fluctuations in the current market are influenced by speculation and other factors," it said.
China''s cotton output this year is expected to remain stable, with weather disasters about the same as in previous years, the association said. Commercial inventories were about 2.87 million tonnes at end-April, about 1 million tonnes higher than the same time last year.
The comments came after the China National Cotton Reserves Corporation said it would soon restrict purchasing at its daily auctions to textile manufacturers, according to a statement from the company posted on industry website www.cottonchina.org.
The China Cotton Association said the state sales could be extended to end-September if market supplies were insufficient.
Source: Business Today, India Friday, 08 June 2018