China’s state cotton stockpile hit 4.36 million tonnes by the end of last week after adding 410,660 tonnes during the week, official statistics show on Monday. Stockpiling by the world’s top cotton buyer is a driver of global prices. China’s buying for state reserves, now in its third year, has pushed up domestic prices and stoked imports of cheaper cotton.
The state reserve’s purchases started off slower in the current season compared to last year as ginners adjusted to higher quality standards and a delayed harvest in Xinjiang, China’s top cotton-growing region, led to tight supplies. Total purchases for this year’s stockpiling program are likely to be lower than last season’s 6.5 million tonnes because of a smaller cotton crop.
Beijing started selling off the older fiber in its stocks at the end of November to reduce its hoard of cotton. It has sold 202,719 tonnes of the 2011 crop since daily auctions started on November 28, including 155,199 tonnes of the domestic fiber and 47,520 tonnes of the imported fiber.
Data in the attached table was compiled by Reuters based on information from the China Cotton Information Center (www.cottonchina.org), an industry portal owned by the China National Cotton Exchange, which handles the state reserve’s purchases and sales.