The China National Development and Reform Commission or NRCD a few days ago announced that they would begin selling a portion of Chinaâ€™s estimated 58 million bales of reserve stocks beginning in early May.
According to the NRCD, 2 million metric tons (the equivalent of about 9 million 480-pound bales) will be offered for sale in 2016. Only a set amount can be purchased daily, apparently to avoid giving the appearance China is dumping cotton on the market.
According to Dr. Jody Campiche, the National Cotton Councilâ€™s vice president for economic services, it remains to be seen whether China will be any more successful in this yearâ€™s auction than last yearâ€™s â€“ when almost no cotton was sold.
Back in February the price of cotton was about twice that of polyester, the gap has narrowed a little bit, but it is still a pretty significant gap, and that gap is not allowing cotton mill use in China to recover.
While, cotton marketing experts have been arguing about the quality of Chinaâ€™s cotton in reserves for three years. Now they may be about to find out just how good â€“ or how bad it is.
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