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  • 1.4.4-THE WORLD COTTON MARKET-TRANSITION TO AN ASIAN BASIS

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  • Transition to an Asian (Far Eastern) basis

    Chapter 1 - The world cotton market - The Cotlook Indices 

     
     
    The change of emphasis to an Asian geographical basis was a logical progression from the long-established, European-based A Index. The change reflects the accelerating change in cotton trade flows since China’s accession to WTO in 2001. Asia (in particular China) represents the lion’s share of global raw cotton consumption and imports, whereas spinning activity has declined steadily in Europe, to the extent that the future sustainability of the North European indices must now be in doubt.

    The quality basis of the A Index and the A (NE) Index is identical, namely middling 1-3/32", since this permits the widest possible selection of growths to be monitored. A higher quality base would exclude certain growths that are of importance to mills and would represent too small a section of the market. Chapter 1 – The world cotton market 29 In April 2007, Cotlook announced that the North European indices would be discontinued at the end of the 2007/08 season (31 July 2008), leaving the A Index (based C/F Asian values) as the sole indicator of world prices.