Got a spare bedroom for storing an extra bale of cotton or two? That’s what cotton farmers in China are doing, according to the Wall Street Journal.
A reporter for the Journal recently wrote about a Chinese cotton farmer named Yu Liamin who is storing cotton in two rooms of his home in Huji in Shandong Province, 220 miles southeast of Beijing.
Mr. Yu is believed to be one of thousands of Chinese cotton growers who are hoarding cotton – Mr. Yu has about two bales of seed cotton in his house – in anticipation that prices for their crop will go higher in the weeks ahead.
The reporter, Carolyn Cui, says there’s no way of knowing how much cotton is being stored in private homes. Some believe that with 25 million cotton farmers in China, the stash could amount to 9 percent of the world’s cotton supply.
Nearby Intercontinental Exchange cotton futures were trading at $1.69 per pound in New York today, which is near the 140-year high. But analysts say cotton is being sold in China for the equivalent of $2 per pound.
The Journal article, “Chinese take a cotton to hoarding,” says prices have jumped on fears the world is running short of cotton. Earlier this month, speakers at the Beltwide Cotton Conferences in Atlanta, Ga., said that as much as 96 percent of the 2010 U.S. cotton crop has already been sold.
Chinese cotton imports in December 2010 were more than double the amount from December 2009 as China’s textile mills gear up to meet the demand from a recovering world economy. Whether the cotton stored in private homes could take some of the luster off the picture remains to be seen.
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