Cotton prices are soaring high in China and as a result Chinese agricultural banks have restrained giving loans to cotton purchasers.
This particular situation was quite unprecedented, especially since new cotton was flooding the market. The rise in cotton price was therefore an unexpected smash for cotton dealers.
Chinese textile enterprises believe that rise in cotton prices would invariably increase the cost of cotton yarn. The present rate of No.328 cotton is 13400 yuan per ton and since it has an extremely large storage capacity; it has not been affected by the recent market trends.
While the level 2 cotton price is about 14000 yuan per ton, the level 3 cotton price is nearly 13500 yuan per ton.
However, a significant advantage of this surging cotton prices is that it would benefit the Chinese spot market and create space for a large amount of high-grade cotton.
Fibre2fashion News Desk-China
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