China’s cotton reserve auctions are off to a rapid start, outpacing last year’s sales in the first week alone, a sign of a shortage of high-grade supplies in the world’s top textile market. Beijing sold 1,20,350 tons in the first week of sale that began May 3, 2016. The bales sold, mostly imported cotton, represented nearly the entirety put up for sale and almost double the total volume sold in 2015.

This indicates a serious shortage of high-grade cotton for China’s textile sector. In the past, reserve sales have met tepid demand, raising questions over the quality of the fiber that’s piling up in China’s warehouses following a stockpiling program that Beijing scrapped in 2014.

The country's inventories were estimated to have swollen to some 11 million tons during the program. The aggressive buying pace is likely to continue as China’s spinners remain short of cotton. The daily rate of about 30,000 tons auctioned is likely to continue to be upped and it appears this year's offer price was more acceptable to buyers.

For 2016-17 crop year China's imports are expected to be up slightly from this year’s 13-year low but only one-fifth of the record buying pace seen four years ago.