Restart Cotton Auction To Keep Cotton Prices Under Pressure

According to the news of March 23rd, China plans to restart the auction of reserve cotton in the second half of 4.

Price pressure.

China's total cotton reserves have reached 11 million tons, the highest in the world.

Si Yinjian, deputy director of the national development and Reform Commission, told reporters that the State Cotton store auction will be held in mid and late 4.

However, the quantity and quality of cotton auction has not been announced.

Most of the national cotton reserves will be sold to domestic buyers, but the reduction in demand for imported cotton by Chinese buyers may also affect global cotton prices.

Because of the unclear quantity and quality of the auction, it is not yet clear how much impact the national cotton auction will bring to the international cotton price.

This is the second round of China's attempt to reduce inventories.

Last year, 7-8 months, the Chinese government tried to auction 1 million tons of state cotton, but the result was not as good as expected, only 63413 tons, because the buyer said the price was too high.

However, this year China

Supplies are tight because the government has tightened import quotas for cotton, reducing the number of overseas cotton entering China, and China's cotton imports in February fell 65% from a year ago.

The Chinese government has begun to carry out agriculture.

In an attempt to reduce inventories and keep prices in line with international standards.

Moreover, as time goes on, the quality of cotton will decline, so the government will not be able to store it all the time.

Earlier, the reporter quoted Yin Jian as saying that the NDRC plans to sell more high-quality cotton and will give priority to the sale of imported cotton.

China's new round of national cotton auction is expected to drag down the ICE cotton contract.

So far, the ICE cotton contract has fallen by about 5%.

Cotton prices remained at the current level until other news about China's auctions came out.

"The market is particularly interested in the quality of the auctioned cotton," said TobinGorey, director of agricultural strategy at CBA.

"If the majority of the inventory is high quality cotton, it will replace China's import demand."

He said.