China: State reserve sales and mill quota entitlement

The number of enterprises registered to participate in buying cotton at auction from the state reserve is now 1,300 and their combined theoretical entitlement is 8,836,702 tonnes under the current policy (for purchases by the end of July). By May 16, they were shown to have procured 1,566,315 tonnes (a figure that differs marginally from the sum of the daily auction totals).

Based on the last mentioned figure, import quota under the 3:1 principle (whereby every three tonnes purchased from the reserve gives entitlement to one tonne of sliding-scale import quota) could be allocated to the tune of 522,105 tonnes (though not all mills that have bought from the reserve are necessarily eligible to receive import quota).

Quota has already been allocated against the quantities purchased (totalling 571,431 tonnes, based on daily auction sales reports) between the commencement of this year’s sales auctions (January 14) and February 28, and during March (437,507 tonnes). Allocation is reported recently to have commenced in certain regions against the amount taken up from the reserve during April (303,319 tonnes).

The current list of purchases from the reserves by mill can be found here.

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