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21 May 2014 | Gurjit Degun
The price of Chinese cotton has fallen by around 13 per cent year-on-year as China begins to sell some of its reserve stocks.
According to Mintec, the current price of cotton in China is 17,190 Chinese Yuan per metric tonne (£1,631) compared to 20,140 Yuan per metric tonne (£1,912) at the end of May 2013.
China’s current cotton supply accounts for 60 per cent of the world’s reserve stocks, explained Mintec. It added that the price decline follows the Chinese government’s announcement in April that it would lower the starting price of its cotton reserves being sold in its daily state auction.
“In addition, 200,000 tonnes of high quality imported cotton has also been offered for bidding in the market,” said Mintec. “As the stockpiling policy comes to an end in China, the government will no longer purchase cotton from farmers, whose inventories will increase as a result. Instead, to support farmers, the government will introduce direct subsidies to cotton growers in the next 2014/15 season.”