MUMBAI (Commoditiescontrol) – China has offloaded over 95 percent of cotton from total quantity put for auction during the current season, which commenced from May 3 in order to get rid of massive stocks.
According to data compiled by commoditiescontrol state reserve has sold 16.88 lakh tonnes of cotton as on August 5, 2016 from target of 20 lakh tonnes.
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China state reserve this week (Aug 1 to Aug 5) recorded second lowest weekly sales after circulation of rumors that the state cotton auction would be extended from Aug 31 to Sep 30 and the wait-and-see sentiment is heavily covered on the Chinese cotton market.
China state reserve has recorded highest weekly sales of 149,298.29 tonnes during the week July 11-15.
The floor price announced by state reserve has dropped since last couple of week after consistent week-on-week rise since May 16 amid strong mills buying and in line with futures, which rose over 26 percent during the same period.
ZCE futures price (Jan) contract and state reserve floor price around 17 percent, whereas average auction price rose more than 11 percent due to sharp correction of 9.16 percent in last couple of weeks.
Overall buying interest by mills has faded as previously, the key factor helped strong state reserve sales was the inadequate supply of reserved cotton auction, but now, as the auction is prolonged, the supply will ease, so the whole industrial chain loses the upward momentum.
(By Commoditiescontrol Bureau; +91-22-40015533)
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