China'S Cotton Inventory Is Rising Enough To Make Up For The Demand Gap In The Next Six Years

Joe Nicosia, CEO of Allenberg Cotton, the world's largest cotton trader, said that China Cotton inventory This quarter will rise to 9 million tons, enough to make up for the demand gap in the next six years.

As China increases cotton purchase to support domestic cotton prices and increase cotton farmers' income, cotton stocks are rising. This year, China may purchase 5 million tons for retention, up from 3.2 million tons a year ago.

"As long as China maintains the mechanism of subsidizing cotton farmers, global cotton production is prone to surplus," Nicosia said. "Can you imagine the demand gap for six years' imports in any country other than China? All the cards are in China's hands."

As cotton farmers expand their output, Cotton price It plummeted 68% from last year's record high. According to the data of the International Cotton Industry Advisory Committee, the global cotton inventory starting from August 1 will reach a record 16.4 million tons, an increase of 17% year on year.

Nicosia said that the global cotton surplus was 13.9 million bales (218kg) except for China, and China's decision on how much to absorb would determine the trend of the cotton market. The US Department of Agriculture said that the global cotton inventory could reach 79.11 million bales as of July 31. As the inventory increased by 21% to 36.61 million bales, China will import 11 million bales, down 55% year on year.

In March 2011, cotton prices reached a record high of US $2.197 per pound. Among the 24 commodities tracked by the S&P Goldman Sachs Commodity Spot Index, cotton's performance this year is second only to that of Arabica coffee. ICE futures prices in the United States closed at 70.21 cents per pound yesterday, down 24% year to date.

As long as China restricts the supply of competitively priced cotton, consumption growth will shift to other Asian countries. China needs to sell reserve cotton at competitive prices, otherwise it may lose Global textile industry And endanger the employment of the industry.