The Chinese Government Will Sell Some Cotton Stocks Or Lower Domestic Cotton Prices.

It is reported that the Chinese government is on sale.

Inventory inquiry

And cotton industry.

If the plan is implemented, it may lower domestic cotton prices and further reduce them.

Demand.

After three years of temporary cotton purchase and storage policy, China's national cotton stocks are estimated at around 11 million tons.

The government is under pressure to sell old cotton. The longer the cotton is stored, the harder the quality will be, and the cost of storage will increase.

Because the price set by the government is not attractive, last year's auction sold less than 64 thousand tons, far below the target of 1 million tons.

According to a participant, last December, a closed door meeting of China cotton net organized by the state-owned industry research institute, cotton merchants and textile enterprises and government officials exchanged views on the sale of the national cotton storage program.

The person was not authorized to comment on the media.

Zhu Beina, President of the China Cotton Textile Industry Association (CCTA), said that some people also consulted the association on the relevant plans.

Du min, an expert in the Rural Economic Research Center under the Ministry of agriculture of China, believes that the current situation is fundamentally unreasonable. Half of the world's inventory in China must be released.

The Chinese government will regularly consult Du min on cotton policy.

He pointed out that the quantity of 10 million tons of cotton in the warehouse could be quite large, and the financial burden and its impact on the market were quite large.

The national development and Reform Commission, which is responsible for China's grain and cotton policy, has not responded to requests for comment on relevant discussions.

Rumours of possible sale of cotton reserves led to a 1.45% fall in May cotton in the first two trading days of the year.

The price of cotton in May is 11325 yuan per ton, which is equal to the import price.

International market participants are concerned about the above plan, because the sale of reserve cotton may further suppress China's demand for cotton imports.

China is the largest textile country in the world.

Du Min said that although the timing, price and quantity of the future sale need to be determined, the industry and experts hope that the government can adopt another pricing mechanism different from the fixed bidding price.

She also said that the price should be in line with the international and domestic market prices.