Dumping Of Reserve Cotton, China'S Cotton Market Appears "Buy High And Sell Low".

< p > it is not a reasonable thing to say "buy high and sell low" is a reasonable thing, but the Chinese cotton management organization should sell its reserve cotton in the past to stabilize the high price purchase at a price lower than this year's harvest.

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"P" > China a href= "//www.sjfzxm.com/news/index_q.asp" > reserve cotton < /a > management company (CNCRC) started auctioning the reserve cotton purchased in 2011 this week. The minimum price set by the Chinese government for national cotton reserves is 18 thousand yuan per ton.

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< p > but these cotton are not actually really used for spinning, because cotton can become crisp if storage time is too long.

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< p > traders say: < /p >

The latest measures of < p > China have "adverse effects" on global cotton prices. In fact, in the past few years, China's "a target=" _blank "href=" //www.sjfzxm.com/ "textile" /a "plant did not actively purchase State Cotton stores, but continued to import large quantities of cotton.

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< p > China is the world's largest a href= "//www.sjfzxm.com/news/index_c.asp" > cotton < /a > producer and consumer countries.

The US Department of Agriculture estimates that China's cotton reserves are estimated to have risen to 10 million tons, accounting for 60% of global cotton stocks, but most of those reserves were acquired in the past few years when cotton prices rose, and ICE cotton has dropped to a low of 10 months.

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< p > FT commented: < /p >

< p > China's behavior of high buying and low selling has erected a grand monument which shows the power of the national planning model.

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Less than two years ago, when cotton prices looked down, China began hoarding cotton to encourage farmers to grow cotton (price fluctuations could bring a crisis to China's cotton industry). P

Now China is considering changing direct subsidies to cotton farmers.

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< p >...

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< p > although it will take some time for China to throw away its cotton, the balance between supply and demand will eventually be restored.

Australia ended its policy of supporting agriculture in 1991, and it took ten years to completely empty the reserve wool.

In the process, agriculture and animal husbandry suffered huge losses, but free market innovation finally defeated state control.

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The regulatory authorities of P may also go through a similar stage.

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