Reuters, Beijing, January 14 - According to sources, the Chinese government is consulting the textile and cotton industry for the sale of some cotton stocks. If the plan is implemented, it may lower domestic cotton prices and further reduce import demand.

After three years of cotton temporary storage and storage policy, China’s national cotton stocks are estimated to be around 11 million tons.

The government is under pressure to sell old cotton. The longer the cotton is stored, the more difficult it is to ensure quality and the higher the cost of storage. Since the price set by the government was not attractive, last year's auction sold only less than 64,000 tons, far below the target of 1 million tons.

According to a participant, in a closed-door meeting organized by the state-owned industry research institute China Cotton Network (Cncotton.com) in December last year, ginners and textile companies exchanged information with government officials on the sale of the national cotton storage plan. opinion. The person was not authorized to comment to the media.

Zhu Beina, president of the China Cotton Textile Industry Association (CCTA), said that some people have consulted the association on relevant plans.

Du Yu, an expert at the Rural Economic Research Center under the Ministry of Agriculture of China, believes that the current situation is simply unreasonable. Half of the world's stocks are in China and must be released. The Chinese government will regularly consult Du Fu on the cotton policy.

He pointed out that the amount of 10 million tons of cotton in the warehouse can be quite large, and the financial burden and its impact on the market are quite large.

The National Development and Reform Commission, which is responsible for China's grain and cotton policy, did not respond to faxes requesting comment on the discussion.

Rumors of possible sale of reserve cotton have caused May cotton to fall 1.45% in the first two trading days of the year. The current price of cotton in May is 11,325 yuan per ton, which is the same as the import price.

International market participants are paying attention to the above plan, as the sale of reserve cotton may further suppress China's cotton import demand. China is the world's number one textile power.

Du Fu said that although the timing, price and quantity of future sales still need to be determined, the industry and experts hope that the government can adopt another pricing mechanism different from the fixed bidding price. The fixed bidding price has not been listed in the past year. Can attract enough buying interest.

She also said that prices should match the international and domestic market prices. 2