BEIJING: China’s cotton imports nearly doubled on the year in September, captialising on a recovery in demand from the world’s top consumer that helped cotton futures power to a record high on Friday.
“We have global supplies at the tightest level since 1994/95 when the previous record was set, and it doesn’t appear to my mind that the supply issue is going to be rectified soon even with a larger U.S. cotton crop,” said Luke Mathews, commodity strategist at Commonwealth Bank of Australia.
“We are going to see a 12-month period of tight supplies continuing in the global market.”
China’s demand, which tailed off last year during the financial crisis, has surgeed, with the China Cotton Association saying imports in September totalled 201,000 tonnes, a rise of 97 percent from a year earlier, although less than the volume that arrived in August.
The China Cotton Association on Thursday trimmed its estimate of China’s cotton output this year to 6.64 million tonnes, the second cut in its forecast in just over two weeks.
The new forecast would be down 5 percent from its estimate of 7.0 million tonnes for last year.
China’s economic planning ministry warned on Thursday against speculation in the country’s cotton market, but analysts said this may not have much impact because strong liquidity is supporting prices.
Many small and mid-sized textile companies have already suspended production as they can’t afford the high prices, and some cotton traders said they had stopped buying the crop. Reuters
