The commercial cotton stocks issued by one institution were not in line with the actual stocks

Looking from the first rumor, there are different views on stock data. Every enterprise and institution has own investigation, and the differences on the stock data between the relative institution and actual market may have own different way to calculate the data. According to our views from the market situation, the stock may be not that tight like the rumors saying less than 2 million tons. Some enterprises hold the stock till now and sales are scarce. Nevertheless, supply of spot cotton at lower prices gradually reduce with the sales from Oct 2022 to May 2023, especially when ZCE cotton futures slumped on May 25-26, sales have improved obviously, and mainstream basis climbs up quickly. Some sellers that offer high prices also start to sell. Later, with the gradual reduction of cotton inventory, basis is expected to go firmer gradually. Moreover, monthly cotton imports have been constantly below 100kt this year, and till Aug and Sep, 2022/23 cotton inventory may tighten gradually. However, no obvious supply gap is seen currently.