China has sold 8.78 percent of the cotton on offer from its state reserves after the first week of sales, confirming expectations of poor demand. Beijing is aiming to sell as much as 1 million tonnes of fibre from state stocks by the end of August as part of a plan to gradually reduce its bulging reserves.
But with plenty of commercial inventory still available in the market, and the state auction prices relatively high, mills have held back from bidding. After selling almost a third of the offer on the first day of sales, selling slumped to as little as 2 percent of the volume on offer later in the week. Total volumes sold to date are 23,551 tonnes. Mills were mainly interested in the cheapest crop, the 2011 domestic cotton. None of the 2012 domestic cotton has been sold, and only limited quantities of imported fibre attracted buyers early in the week.