Over 95 per cent of the cotton sold in the first period was from the 2011, 2012, and 2013 crops. All sales were domestic cotton, with just over 70 per cent being from the Xinjiang region.
In the second sales period, Xinjiang cotton accounted for 32 per cent of the sales, 61 per cent was from the rest of the country and imported cotton filled the remaining 7 per cent. Ten per cent of the cotton purchased was from the 2019 and 2020 crops and the rest was from earlier seasons.
The actual amount of cotton remaining in the State Reserve is unknown, but is estimated at between 8.7 and 9.8 million bales, likely the lowest since August 2019 and before China’s massive build-up of reserve stocks starting in 2011, USDA said.
Roughly 2.2 million bales (475,000 tonnes) of domestic cotton are estimated to be in the reserve. The amount of imported cotton held is believed to be at least 6.5 million bales (1.4 million tonnes) with the possibility of another 1.1 million (240,000 tonnes) being held by the state trading or state-owned enterprises.
The 2021 sales program follows China’s reserve rotation policy, which has virtually eliminated the reserve stocks of domestic cotton from the 2011-2013 crops (which at one point approached 60 million bales). Remaining stocks of domestic cotton are largely from the 2019 crop while stocks of imported cotton are mostly from the 2018-2020 crops.
It is anticipated that the State Reserve will again hold sales in 2022 and will also replenish reserves to maintain its stocks at the current level, USDA added.
Global production is down with a significantly smaller crop in Pakistan more than offsetting larger crops in Benin, Turkey and Uzbekistan. Use is mostly unchanged. Ending stocks are down more than 1 million bales on fewer supplies in India, Pakistan and China. Global trade is up slightly with higher imports for Pakistan and Vietnam more than offsetting lower projected volumes for China.
US production is up marginally to 18.3 million. Exports and use are unchanged for the second consecutive month, with ending stocks also unchanged.
ALCHEMPro News Desk (DS)
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