The unusually wet and cold period that persisted during the September 26 through October 10 time period in the North China Plain has taken a toll on the quality of the cotton crop. The rain and cold temperatures triggered boll rot, lowered yields and significantly impacted cotton grades. Clear, but cool weather is now forecast across the entire North China Plain. Daily highs today are in the 21 to 22-degree Celsius range or 69 to 71 degrees Fahrenheit, but by Friday, October 19, are forecast to cool to 17 to 19 degrees Celsius or 62 to 66 degrees Fahrenheit in many areas. The first major problem is color grade, with little additional cotton harvested after the rain likely to be middling and above and most grades to fall to the equivalent of SLM or lower.
Domestic prices are reacting by a significant rally in T328 prices, with procurement prices by some mills up 800 yuan per ton off their seasonal lows. The average landed-the-mill price has rallied over 400 yuan per ton. Increased interest in imported and reserve cotton has occurred as well. Indian new crop has sold to Chinese mills on a daily basis since the market reopened after the National Day Holiday.
