Chinese cotton prices are adopting the opposite trend from the global market. Cotton prices are hovering at a high level in most countries, but the prices are falling in China. An analysis said that China Cotton Index (CCI) declined around 31.10% since February 2022 when prices peaked. Prices crashed 24.13% after the US ban in June this year.
According to TexPro, China Cotton Index (variety 2227B) was traded at CNY 17,157 per ton in August 2021.
The prices registered an upward trend till February except in December 2021. Cotton peaked at CNY 21,051.56 per ton in February this year. Chinese cotton adopted a similar trend as the global movement till February.
But the trend reversed in the coming months as the effective date of the US ban on cotton and cotton products originating from the Xinjiang region of China was nearing. Cotton slipped around 7% in the next four months till June when the ban came into effect.
As per TexPro, Chinese cotton crashed to CNY 15,698.85 per ton in July from CNY 19,117.67 per ton in June 2022. It means that the prices registered a steep decline of 17.88% in July.
According to media reports from China, local government and industry are taking the US ban as a hostile step in international trade activities. The Chinese government and business community are trying to consume locally banned cotton and export it to other countries, but market sentiments are dampened due to oversupply.