8 Jan 2018
China Sourcing Update: Prices of Natural Textile Materials (Dec 2017)
Prices of Natural Textile Materials
1. Cotton price indices go down in December
The price indices of cotton dropped in December. The CC Index 3128B, for example, fell from 15,860 on 30 November to 15,699 on 29 December.
In our view, the decline in cotton prices in the month was caused mainly by an abundant domestic supply of cotton and a weak restocking demand from downstream textile manufacturers. Moreover, market expectations of an increase in the domestic supply of cotton in the coming months also put downward pressures on cotton prices, as the Chinese government plans to sell its cotton reserves again from 12 March to the end of August 2018.
Looking ahead, we believe that cotton prices will decline further, as the domestic supply of cotton is expected to remain abundant and the downstream demand for cotton is likely to stay soft in the near future.
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