China's spinning sector has slowed down owing to the country's non-competitive cotton prices and dipping stocks market. This is also due to the surplus of cotton in the country. China tried to auction off some of the roughly 11 million tons of cotton it has under its cotton buying scheme, during July and August this year. However, only 3.4 per cent of the total was sold. According to China National Cotton Exchange data, an unexpectedly low total of 63,412 tons of cotton was moved during the sales. Estimates had pegged the sales during the period at a much higher 300,000 tons.

However, mills hardly made an appearance as they are aware that the inventory available is still abundant and many were looking to avoid the high benchmark auction prices, which ranged from 13,200 yuan ($2,073) to 15,000 yuan ($2,356) per ton, compared to the Zhengzhou exchange’s, which are around 12,465 yuan ($1,958).

Also, consumption of China’s cotton has slowed down. The International Cotton Advisory Committee (ICAC), in its latest report stated that domestic cotton prices continued to fall in August this year, averaging $0.95 per pound. The still-too-high cost, though is limiting growth in China’s cotton spinning sector, it added. The country’s cotton consumption is to hit around 7.7 million tons, which is well below mid-2000’s highs of 10 million tons.

Besides, as per predictions, China’s cotton imports would dip by 12 per cent to 1.6 million tons, which would make the fifth season of decline after the 2011-12 season’s 5.3-million-ton peak.