China is considering issuing an import quota and selling some of its cotton inventory, a move analysts described Saturday as a tradeoff that would protect farmers' interests while allowing textile companies in the world's largest cotton consumer and importer to buy some foreign cotton at lower prices.
"We have heard from textile mills that local official sectors have notified them that they might be able to get a one-ton import quota if they buy three tons of State Reserves," Wang Lu, a researcher at cottonchina.org, told the Global Times Saturday.
Wang said that the information is not confirmed, pending official notice from the National Development and Reform Commission (NDRC).
Cottonchina.org is a cotton market information provider under the China Cotton Association, the China National Cotton Exchange and Cotlook Ltd, and is the first to get and distribute official sales notices about State Reserve cotton from the NDRC.
China's State Reserve has bought 5.14 million tons of cotton since September 10, 2012, 65 percent more than the reserve for all of 2011, bringing the total reserve to 7.29 million tons as of December 27, the NDRC said in a statement on December 28.
By March of this year, China is expected to accumulate some 8 million tons of cotton, equal to a third of total global output in 2012-13 and enough to supply China's mills with raw material for a year.
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