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China State Reserve’s cotton sales total 5.5mn bales in 21

China suspended cotton sales from the State Reserve on December 1. The total sale of 5.5 million bales occurred in two separate periods from July to the end of November.

According to the USDA, from July 5 till September end 2.9 million bales were sold, while in the October-November period, 2.6 million bales found buyers.

cotton
Figure: The 2021 sales program follows China’s reserve rotation policy, which has virtually eliminated the reserve stocks of domestic cotton from the 2011-2013 crops.

Also, in the first period over 95 percent of the cotton sold was from 2011, 2012, and 2013 crops.

All sales were domestic cotton, with just over 70 percent being from the Xinjiang region.

In the second sales period, Xinjiang cotton accounted for 32 percent of the sales, 61 percent was from the rest of the country and imported cotton filled the remaining 7 percent.

Ten percent of the cotton purchased was from the 2019 and 2020 crops and the rest was from earlier seasons.

USDA said, the actual amount of cotton remaining in the State Reserve is unknown, but is estimated at between 8.7 and 9.8 million bales.

The lowest since August 2019 and before China’s massive build-up of reserve stocks starting in 2011.

In which, 2.2 million bales of domestic cotton are estimated to be in the reserve.

The amount of imported cotton held is believed to be at least 6.5 million bales with the possibility of another 1.1 million being held by the state trading or state-owned enterprises.

The 2021 sales program follows China’s reserve rotation policy, which has virtually eliminated the reserve stocks of domestic cotton from the 2011-2013 crops.

The remaining stocks of domestic cotton are largely from the 2019 crop while stocks of imported cotton are mostly from the 2018-2020 crops.

It is anticipated that the State Reserve will again hold sales in 2022 and will also restock reserves to maintain its stocks at the current level, USDA added.

Compared to large crops in Benin, Turkey, and Uzbekistan, Pakistan has significantly reduced global production due to smaller crops.

Exports and consumption remained unchanged for the second month in a row, while last stocks remained unchanged.

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