China Rolls Out Cotton Reserve Auction Plan

 

FRIDAY, 2016-April 15:

 

Today, April 15th, the National Development and Reform Commission (NDRC) and the Ministry of Finance (MOF) jointly issued a notice to regularly auction off national cotton reserves.  We summarized the highlights for your review and further internal distribution as you see appropriate.   We will follow an analysis next week.

 

  • China will follow a principle which is to mainly auction off current reserves and moderately refill new reserves.  The National Cotton Exchange is responsible for the release based on an open bidding process.

 

  • China will regularly auction off the reserves from March to August each year.  The Chinese government set a cap for daily auction amount at 50,000 MT at dynamic market price.  The price will be updated on a weekly basis.

 

  • The sales of cotton reserves will halt from September to the following February when the new domestic cotton harvest is in the market.  During this period, the Chinese government plans to purchase high quality cotton to refill their reserves at market price.  The total refill amount will not exceed 30% of the total amount for the reserves sale.

 

  • For 2015/16 auction, China will release cotton reserves from May 3rd to August 31st, The daily auction amount will not exceed 30,000 MT, and total amount will not exceed 2MMT.  The auction will give priority to imported cotton.

 

Provided by Yuan & Associates

 

More Advocacy Issues

Please click below for details regarding the effective date and compliance dates for the U.S. Commodity Futures Trading Commission’s final rule, Position Limits for Derivatives. Provided by: Delta Strategy Group. More Here.

Read More
 

The American Cotton Shippers would like to thank USDA’s Farm Service Agency for extending the marketing assistance loans (MALs) for non-recourse loans from 9 to 12 months. See notice below. More Here

Read More
 

On January 7th, ACSA along with other groups within an agricultural transportation working group wrote a letter to President-elect Joe Biden and the transition team requesting their support in advancing transportation infrastructure and policies to enhance the efficiency and cost-effectiveness of transporting agricultural products. Letter Here

Read More