China mills seek more cotton from state reserves to ease supply squeeze

Beijing

CHINA'S mills are urging the government to release more cotton from state reserves, as fewer quotas for low-tariff imports and higher demand for local yarn tighten supplies.

Greater dependence on reserves at the world's top importer could dent a rally in global cotton futures that hit a two-year high this month. But in the long term, it could be bullish for prices as China runs down its massive stockpiles. "They need to sell more from the state reserves. The limited quantity is a major problem," said Ashley Liang, general manager of import and export at the spinning division of Dahai Group, a conglomerate in eastern Shandong province.