Cotton demand from China, the world’s biggest consumer, may weaken as high costs encourage consumers to switch to cheaper synthetic fibers, said Chen Tao, chairman of Louis Dreyfus (Beijing) Commodities Trading Co Ltd.Stockpiling by China may keep cotton at about 20,000 yuan ($3,091) a metric ton, Chen said in an interview at a conference in Dalian.
Prices at this level may make cotton a “luxury”, and not something cheap and affordable to everyone, said Chen. “It’s like when juice is too expensive, people drink tea, and when tea gets expensive, they’ll have to make do with just water,” he said.
China cotton prices remain on a downward trajectory so far this year after the rise last year, according to China Cotton Association(CCA). Analysts said huge volatility of cotton prices since gave a blow to traders that hoarded cotton.
Ma Wenfeng, an analyst with Beijing Dongfang Agro Consulting Co. Ltd, said china cotton price had declined nearly 20 percent from its peak, but it still stayed at a higher level.
China Cotton price hit one after another new record in the second half last year: China”s Grade-328 cotton(standard cotton)price rose 40 percent October-November. And the soaring prices directly raised costs of textile and clothes industry as new clothes prices rose 20-30 percent in general.
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