Mills Switch Buying Interest Back to Local Cotton
Source: globecotnews Date: 2008-06-20
The rapid rise in international offering prices has led to Chinese mills shifting much of their buying interest back to domestic cotton from imported. Local cotton merchants in many regions of the country are reporting that an increasing number of spinning mills are calling to inquire about local cotton this week. Merchants indicate mills intend to procure additional supplies of local cotton. Many of the spinners now seeking local cotton are medium and small-scale operations, with most of these groups having little cotton in storage.
This increased buying interest has caused excitement among local merchants, who need to liquidate inventories to meet Agricultural Development Bank payment deadlines. Many merchants have raised offering prices in an attempt to recover their storage and interest costs. The average offering prices of T329 M 1-1/8" in many areas is now 14,100 yuan per ton, which is up 200 yuan from levels prevailing at the beginning of the month. Ginners also report that demand for cottonseed oil and hulls has improved, making any remaining seed cotton more valuable to ginners.
