China cotton stocks sell-down overshadows US data
The start by China of the sell-down of a small amount of its huge cotton reserves overshadowed a, cautiously, positive reaction to US data on the fibre to snuff out ideas of a rise in futures.New York's March cotton contract, which rebounded in the last session more than 2% from its intraday lows, eased on Monday after China unveiled the start of sales from its state reserves, which the International Cotton Advisory Committee sees potentially hitting 10m tonnes.The sale, of 40,145 tonnes, represented only a small portion of the stocks, and China had been long forecast to make some disposals, if only to clear space for purchases from the domestic market.China is attempting, through intervention, the difficult balancing act of supporting cotton returns to farmers while keeping prices low enough so as not to damage the competitiveness of domestic mills, although many of these have struggled with the country's prices.China dynamicsThe sale offered a reminder to investors of the huge level of Chinese stockpiles, the handling of which has been widely named as the greatest uncertainty in the world market.Indeed, the US Department of Agriculture on Friday, in the latest edition of its much-watched monthly Wasde crop report, raised by 653,000 tonnes to 8.84m tonnes its forecast for China's overall stockpiles as of the close of 2012-13 – half of the world total....MORE
