Zhengzhou cotton futures market starts to decline

Since late May, Zhengzhou cotton futures market starts to decline. During May 23 and May 30, the futures market declined sharply. Sep contract once reached the lowest of 20,060yuan/mt, down by 1,975yuan/mt from the highest of 22,035yuan/mt in May. From Jun 15 to Jun 16, the market slumped again. Sep contract once dipped to 19,480yuan/mt in Jun, down by 1,150yuan/mt from the highest of 20,630yuan/mt. The large decline in recent two months is mainly attributed to sluggish downstream demand and large quantity of unsold stocks with the impending arrivals of new cotton. Under this background, the decline in Jun is also impacted by the worries over the US Fed hike in interest rate, coming enforcement of U.S. ban on Xinjiang goods, and the less possibilities of state cotton reserves policy.