China planned a market-control strategy designed to support cotton farmers, with a sudden decline in export orders for China-made textiles and garments which in turn affect domestic cotton prices. Now they have too much.

China began stockpiling what has become 11 million metric tons of cotton in 2011, or 10 billion pairs of jeans. The program began in March of 2011 as an attempt to improve the livelihoods of Chinese farmers by setting a floor prices. Unfortunately, cotton prices fell leaving China with 60 per cent of the world's cotton stockpiles. However, cotton does not keep forever. An auction of the stockpile is scheduled within the coming months.

Said Lucy Craymer of the Wall Street Journal in Hong Kong about how the sale. It's important to note that this cotton isn't probably going to end up on the global market. However, China makes up about 30 per cent of global cotton consumption. So if Chinese producers are using this cotton rather than cotton from elsewhere, it means there just isn't demand there. We've already seen demand for cotton from China drop substantially. We're already starting to see that cotton is trending down about 8 per cent this year. It's going to have a huge impact as we go forward.

Stockpiling is something that happens not just to make money, but because you are trying to help farmers out there who are suffering from low prices.