By Bloomberg News
May 25 (Bloomberg) -- China, the world’s biggest cotton producer and user, sold 48 percent of the 9,204 metric tons of reserves available on the second day of a government auction, according to data compiled by industry watcher Cottonchina.org.
About 4,402 tons of government stockpiles were purchased, Cottonchina.org said today in a report. The sales averaged 13,045 yuan ($1,912) a ton, or 50 yuan higher than the average price on May 22, the statement said.
“The auction today wasn’t very active,” the statement said. Still, cotton auctioned at its Tianjing warehouse was the most popular with all 1,623 tons of cotton on offer selling out, the statement added.
China will hold daily auctions of about 10,000 tons of cotton from reserves in a bid to ease tight domestic supplies, an official from the China National Cotton Exchange said today.
“We aim to auction about 10,000 tons of cotton initially,” Sun Juan, an official from the exchange, said in a phone interview. “But the daily auction volume will be adjusted according to market conditions and we might raise it in the future.”
On May 21, China said it would sell 1.52 million tons of its stockpiles. The government by April 10 had purchased 2.72 million tons of cotton, or about a third of last year’s crop, in an effort to boost falling prices.
The cotton being released equals 7 million bales, or 64 percent of the 11 million bales the U.S. Department of Agriculture projects the U.S. will export in the marketing year ending July 31, 2010.
--Richard Dobson, Feiwen Rong. Editors: Richard Dobson, Matthew Oakley.
To contact the reporter on this story: Richard Dobson in Shanghai at rdobson4@bloomberg.net
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