By the end of June 2007, the sowing of cotton is end; most of cotton growing situation like the average year. According to the last statistics of China Cotton Association (CCA), the sown area this year will be 81.64 million mu, equal to last year.

With the reduction of the domestic resources, the cotton price goes up by large margins. In June, the spinning amount and fabrics clothes export keep fast growth; and the cotton import volume rises again to some extent.

The Supply:
1) the cotton price goes up sharply because of domestic resources less and less. The current marketing year will be end after two months, domestic cotton resource is gradually exhausted, and cotton price rises by large margins.

At the same time, the price of Electronic market and Zhengzhou futures exchange also goes up. To maintain domestic cotton price stability, the government decide to auction some old crop cotton in July 16, 2007, the increasing step of domestic cotton price slows down to some extent subsequently.

In June, the domestic cotton price keeps increasing and comes back to the level of initial stages of current marketing year.

The minimum value of China Cotton Index (CCIndex) of Type 328 grades is 12948 yuan per ton in June 1, the supreme value 13026 yuan per ton in June 29 and the average price 12971 yuan per ton that goes up 405 yuan per ton or 3.13% from May, decrease by 675 yuan or 4.8% compared with the same period of last year.
 
2) the cotton import volume increases and the price of import cotton goes up sharply. From this year, the price of import cotton under the sliding duty tariff is higher than domestic price and the cotton import volume decreased by a wide margin from the same period of last year.

But with domestic cotton resource exhausted and price rising, the import volume is increasing to some extent from the earlier stage, but still less than the same period of last year.

In June 2007, 252,500 tons cotton was imported which decreased by 25.25% compared with May; reduced by 33.7% compared with the same period last year.

In January - June 2007, cumulative 1,176,300 tons cotton have been imported, decrease by 52% compared with the same period last year.

In 2006 cotton season (September of 2006 – June of 2007), cumulative 1.7905 million tons cotton have been imported, decrease by 49.4% compared with the same term in 2005. It is estimated cotton import volume will continue rising in the following several months.

In May, the price of import cotton rises sharply. On June 29, China imports cotton price index (FC Index M) is 64.83 cents per pound, increase by 5.24 cents or 8.8% from May 31, transfer to RMB 12734 yuan per ton at 1% tariff which is lower 1047 yuan than Type 328 grade of domestic cotton, 13591 yuan per ton at the sliding duty tariff which is lower 190 yuan than 328 grade of domestic cotton.