China hoarding over half of global cotton reserves

China hoarding over half of global cotton reserves

Staff Reporter

2013-03-11

China’s cotton reserves reached 9.28 million tons in February, accounting for 52% of global reserves, according to the United States Department of Agriculture.

As of Feb. 1, reserves stood at 6.15 million tons, accounting for 83% of the country’s cotton reserves expected in 2013, according to texnet.com.cn, a leading Chinese-language textile website. The record stockpiles will make it difficult for the country to control its reserves for the rest of the year.

The partial release of national reserves of cotton into the textile industry in February further lowered the market price, leading to a record low turnover rate.

The strong cotton demand of many domestic textile companies was underscored due to the relatively low rate of operations. Many companies are still recruiting after the Chinese New Year holidays (Feb. 9-15), said officials with the China National Cotton Reserves Corp. Domestic textile export companies also have to deal with poor exports caused by a slump in international cotton prices last year, said the officials.

The government released a batch of national reserve cotton of medium-quality for 19,000 yuan per ton (US$3,050) on Jan. 14, to meet the demand of domestic textile companies. Companies are, however, reluctant to buy the still relatively high-priced commodity, said analysts. They are resorting to the use of chemical fiber materials in the short-term.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: