There is a growing fear in the domestic Chinese market that cotton stocks are rapidly drying up, resulting in daily cotton prices having steadily advanced for the past several weeks. Prices have shown sizable advances of 100 to 150 yuan per ton this week as mill buying has accelerated. The average price of T328 (Middling 1-3/32") has now reached 13,250 to 13,300 yuan per ton, while T129 (GM 1-1/8") prices have breached 14,000 yuan -- these prices are nearing their seasonal highs.

It appears that many merchants and ginners have exhausted their supply of old crop cotton. Some buyers are discovering that it is far more difficult to find the needed quantity of domestic high grades than expected, which has increased the offtake of consignment cotton. An estimated 40,000 to 50,000 tons of consignment cotton appears to have sold over the past 2 to 3 weeks.