China’s cotton imports fell 28.8% last month from a year earlier to 864,387 statistical bales. Imports for calendar 2015 figured lowest in at least nine years. Other countries projected to increase imports.
U.S. cotton futures finished an inside day in the red Wednesday as a brutal selloff in world financial markets and crude oil raised concerns about demand for the fiber crop.
- Spot March settled down 50 points to 61.97 cents, around the middle of its 94-point range from down a tick at 62.46 to down 95 points at 61.52 cents. It didnΆt challenge either end of the prior dayΆs bullish outside-range reversal and closed a second day above its nine-day moving average.
- May finished down 46 points to 62.28 cents, while December dropped 49 points to close at 62.20 cents.
- Going into the cotton close, the Dow Jones Industrial Average at the dayΆs low had been down 565 points but had slashed the loss to 187 points by 2:19 p.m. CST.
- Volume slowed to an estimated 26,251 lots from 37,069 lots the previous session when spreads accounted for 11,447 lots or 31%, EFP 163 lots and EFS 10 lots. Options volume totaled 1,426 calls and 3,491 puts.
Traders took note of a report that ChinaΆs cotton imports fell to the lowest in at least nine years in calendar 2015, according to Reuters calculations based on trade figures released on Wednesday.
Imports by the worldΆs top cotton consumer have been slowing as the gap between domestic and international prices narrowed and after Beijing reduced the availability of import quotas to boost consumption of domestic supplies.
China imported 188,200 metric tons (864,387 statistical 480-pound bales) in December, down 28.8% from a year earlier, said trade website CNncotton.com, citing customs data.
This brought imports for the 2015 calendar year to 1.48 million tons (6.798 million bales), according to Reuters calculations. The previous low was 1.53 million tons (7.028 million bales) in 2008, according to customs data gathered by Reuters since 2006.
The industry is forecasting a further decline in imports for 2016 after domestic prices fell to a new low earlier this month on expectations that Beijing could sell some of its massive stockpile at a discount, Reuters reported.
Other calculations put imports for the first five months of the cotton marketing year at 434,803 tons or 1.997 million bales, down 43.2% from 3.514 million bales in the corresponding period last season and 68.9% from 6.43 million bales in the August-December period of 2013.
The USDA earlier this month projected ChinaΆs 2015-16 marketing year imports at 5.5 million bales, down 33.6% from 8.28 million bales in 2014-15 and down 61% from 14.12 million bales in 2013-14.
Those would be the ChinaΆs smallest marketing year imports since 2002-03 when the country shipped in 3.13 million bales.
Other importing countries are moving into the void, with 2015-16 global imports projected at 36.07 million bales, up a modest 360,000 bales or 1% from last season.
Bangladesh is expected to replace China as the worldΆs leading cotton importer this season on imports of 5.75 million bales, up from 5.4 million last season, with Vietnam in third place on 5.2 million bales, up from 4.3 million in 2014-15.
Futures open interest rose by 2,869 lots Tuesday to 187,347, with MarchΆs up 531 lots to 115,736 and MayΆs up 1,635 lots to 34,736. Decertification of 2,552 bales dropped cotton in deliverable position to 61,589 bales.
