China is likely to stop buying cotton for its reserves by August, that means imports in China will be ‘down rather severely’ in the next season, feels Jarral Neeper, President of Calcot in Bakersfield, California, at the National Cotton Council of America's Beltwide Cotton Conference. Neeper projected the country's cotton imports could drop 45 per cent to six million bales during the 2014-15 season, which begins August 1.
China quintupled the size of its cotton stockpile over the last two years, aiming to ensure a steady supply to its mills. The country's cotton purchases encouraged farmers around the world to boost production and kept global supplies tight. China's finance minister had said in December that the government planned to shift from stockpiling cotton to paying farmers directly as a way of encouraging production. The end of stockpiling in China will mean a lot more cotton without a home on the world market, Neeper said.
Neeper estimated that China's state reserves would hold 42.6 million bales at the end of the current season. That figure is expected to drop 30 percent in the next season as the state reserve stops buying the fiber. The China Cotton Association said that it had 5.01 million metric tons, or about 23 million bales, of cotton in its stockpiles in the year to last week. It added that plantings would decline for a third year in a row in 2014, down nearly 9 per cent to 4.2 million hectares (10 million acres).
Prices for new-crop cotton will likely be capped around 82 cents a pound because of the availability of cotton on China's domestic market, Neeper added.
www.china-cotton.org
