China Confirms NDRC Purchase Program for Xinjiang Cotton

China Confirms NDRC Purchase Program for Xinjiang Cotton DATE: 2008-10-20

As anticipated in the marketplace, China's CNCRC announced it would purchase 220,000 tons of Xinjiang cotton for the state reserves.  The declared volume was disappointing, as markets were expecting purchases of 500,000 tons.  The cotton will be purchased through standard daily auctions with a maximum price of 12,600 yuan per ton.  The cotton purchased will be Xinjiang cotton delivered to the CNCRC warehouse in Xinjiang.  The maximum procurement price is above the average local spot price in Xinjiang of 12,235 yuan per ton, basis T328, which should make the auction more attractive to sellers; however, the quantity of purchases will limit the impact on local prices.

Globecotnews