Cotton futures at China ZCE futures market closed slightly higher on Friday, with the most active contract CF701 opened at 13320 yuan and settled at 13285 yuan, up 55 yuan from the previous session, following a trade range between 13355-13270 yuan.
Trade volume was 3202 lots and positions stood 12744 lots.
With weather friendly in most parts of the country since September, China sets to have a bumper cotton harvest this year.
According to the latest survey and estimate, cotton production is expected to reach 6.41 million tons in 2006, increasing 12.5 percent from last year, creating a new record in history.
Cotton production in Xinjiang is to surpass 2.10 million tons, also a new historical record and quality better than previous years.
Probable reasons for the price slump:
• Higher cotton production both in China and other main producing countries, and increasing arrival of new cotton into distributing channels provide some pressures over domestic and abroad markets.
• The issue of cotton quota caps the demand in home market.
• The control policy by Agricultural bank on credit and loan has witnessed obvious outcome.
• Cotton business enterprises are cautious to procure new cotton.
On October 20, China national cotton index Cncotton A quoted at 13272 yuan per ton, down 7 yuan than the previous day, and Cncotton B at 12805 yuan per ton, 49 yuan below yesterday, HZCE cotton in 229 grade offered at 13475 yuan, down 35 yuan on domestic cotton market,
Polyester staple fiber quoted at 11200 yuan per ton, down 100 yuan, and Rayon staple fiber at 14200 yuan, falling 70 yuan from last session.
OE 10S traded at 13055 yuan, down 20 yuan; C32S priced at 13055, less 60 comparing to the prior day.
One lot is equivalent to 5 metric tons.
One US Dollar equals about 7.90 yuan.
Fibre2fashion, News Desk - China
marketing@alchempro.com
