China'S Release Of Cotton Storage Foreign Media Said It Will Shake The Global Market.

< p > China has decided to release the country's a href= "//www.sjfzxm.com/news/index_c.asp" > cotton < /a > reserves, which may shake the global cotton market.

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< p > China's national development and Reform Commission said in December 28th that it plans to release cotton reserves to meet the needs of the domestic textile industry.

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< p > however, the NDRC did not specify how much cotton it would release and when it would be released.

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< p > the news reduced the cotton futures price on the day to a three week low of 73.72 cents per pound.

The US Intercontinental Exchange's cotton settlement price fell 0.5% in March, at 75.05 cents per pound.

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< p > as the world's largest cotton producer and < a href= "//www.sjfzxm.com/news/index_s.asp" > consumption < /a >, China began to store cotton from the end of 2011.

The US Department of agriculture predicts that by July 31st, China will have 47% of the world's raw cotton reserves.

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< p > China's purchase of US cotton has supported the < a href= "//www.sjfzxm.com/news/index_cj.asp" > futures price < /a >.

Analysts say the sale of cotton from its reserves may mean a reduction in imports and a decrease in demand for us cotton.

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Flanagan, President of the P Trading Company in North Carolina, said that China's sale of cotton reserves would "make the price of cotton futures go down, but we suspect they will sell only a small quantity of cotton until the late spring planting season is over", said John Flanagan.

If China releases large quantities of cotton reserves, domestic prices may fall, thereby affecting farmers' planting.

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< p > however, it is also rumoured that China may release its reserves with the import of tax exempt or low tax cotton.

Factories that purchase reserves can be allowed to import equivalent quantities of cotton from abroad.

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< p > industry participants say that the quality of cotton produced in China is poor this year, so factories may need to mix imported cotton with domestic reserves.

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"Under such circumstances, because the release of reserves will be linked to potential additional import quotas", the final impact on the market if it is not favorable is also neutral, P Sharon Johnson, a senior cotton expert at Futures Company, Atlanta, said.

The details determine success or failure, so after seeing the final rule, my inclination may change.

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