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China Sourcing Update: Prices of Natural Textile Materials (Feb 2017)

  1. Cotton price indices rise in February

The price indices of cotton went up in February. For example, the CC Index 3128B rose from 15,799 on 26 January to 16,001 on 15 February, before retreating a bit to close at 15,963 on 28 February (see exhibit 1).

The main reasons for the increase in cotton prices in the month included a hike in the prices of cotton futures in China, a tight supply of cotton caused by a delay in the transportation of cotton from Xinjiang to other regions during the Chinese New Year Holidays, and an improvement in the downstream demand for cotton boosted by a rise in the prices of cotton yarn.

Going forward, the supply of cotton is expected to increase in the near term, boosted by the normalization of transportation of cotton from Xinjiang to other regions and the sales of state cotton reserves from 6 March onwards. 2 Meanwhile, the downstream demand from textile manufacturers for cotton is likely to remain strong. All in all, we expect cotton prices to stay high in the foreseeable future.


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Content provided by Fung Business Intelligence
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