In December, 2006, procurement of seed cotton was over, and its purchasing price continued to go up. Cotton price was on the turn and progress of purchase and sale was accelerated. Cotton imports were increased and cotton price was up in international market. Textile production and export kept rapid growth.

 

1. Procurement of seed cotton over

In December, crop of seed cotton was over in domestic cotton growth areas. According to the statistics of spot check from the National Cotton Market Monitoring System, as of the end of December, cotton growers have picked 99.4% of the estimated total output. Driven by lint price rise, seed cotton price in domestic market have continued to be on the turn since December. Domestic price for grade 3 seed cotton was 5.38 Yuan/kg on average at the end of month (equals to 41.3 Yuan/kg), central growth of 0.14 Yuan/kg.

 

2. Cotton price on the turn in domestic market.

In December, the state promulgated new policy of cotton collection and reserve in Xinjiang, cotton price was on the turn in domestic market. The average price of domestic standard grade cotton was 12,812 Yuan/ton including the freight of delivering to works, up 149 Yuan than last month with 1.2 % growth. The contract price of online transaction in The National cotton transaction market was 13,357 Yuan/ton, up 67 Yuan than last month with 0.5 % growth. The contract price of cotton in Zhenzhou cotton future market was 13,661 Yuan/ton, up 225Yuan/ton with 1.7% growth.

 

3. Progress of cotton purchase and sale accelerated

With the turn of price, progress of cotton purchase and sale was accelerated. According to the statistics of spot check from the National Cotton Market Monitoring System, as of the end of December, cotton growers have sold 86.9% of total, down 3.8% year on year; average sales process of ginneries has reached 38%, up 6.7 % year by year.

 

Xinjiang branch, Agricultural Development Bank of China, has loaned to purchase new cotton of accumulative total 1.75 million tons, up 25.9% year on year, accounting for 77.8% of the estimated total output. From September to December, 1.03 million tons of cotton was transported out of Xinjiang, up 450 thousand tons or 77.9% year on year.

 

4. A rise tendency in international market

International market saw a rise in cotton price due to a good turn in USA cotton exports and possible big decrease of cotton planting area in the U.S. The average price of NYBOT March contract was 54.73 cent/pound, up 2.13 cent/pound than last month, with 4.1 % growth. CIF price at Asian main ports was 60.52 USA cent/pound, up 3.69 cents/pound or 6.5% from the previous month. If calculated by 1% duty, it equals to of 12,340 Yuan/ton, 472 Yuan/ton lower than domestic price. If calculated by the sliding-scale tax, it equals to 13,144 Yuan/ton, 332 Yuan/ton higher than domestic price.

 

5. Continuous rapid growth in textile production and export

Textile production and export kept its continuous and rapid growth. In December, china yielded 1.686 million tons of yarn, up 18.9 % year by year. In 2006, china yielded 17.22 million tons of yarn, up 19.9 % year by year. In December, textile exports realized 13.4 billion USD, up to 30.7%. In 2006, china’s textile exports realized 144 billion USD, up 25.2 %. In December, the price for 32 pure cotton yarns was 18,626 Yuan/ton on average, down 151 Yuan than last month, decreasing by 0.8%. The price for Terylene fiber was 11,172 Yuan/ton, down 212 Yuan than last month, decreasing 1.9%. The price difference between mainland standard cotton and terylene fiber was 1640 Yuan/ton, up 361 Yuan/ton.

 

In December, cotton imports continue to recover, according to the statistics from China Customs, 240 thousand tons of cotton was imported, up 85 thousand tons than last month. In 2006, China imported 3.64 Million tons of cotton in total, up 41.6 % year by year, among which, from September to December, importing 614 thousand tons, down 43.4 % year by year.

 

Source: Economic and Trade Department, the State Reform and Development Committee