“The difference in this auction compared to last year’s is they’re expected to release a larger amount of their reserves,” Dr. Campiche said. “And they are supposed to use a price that is driven by the domestic and world markets. So we’re expecting the price to be more competitive compared to last year when they were able to auction off only a small amount of their reserves.”

In 2015, China offered the reserve stocks for the equivalent of $1.30 per pound or nearly 50 cents per pound above the world market average at the time. As a result, a scant amount of cotton was sold, and cotton buyers got to see little of the fiber being held in the reserve.

“Some concluded this was evidence of the poor quality of the reserves,” says John Robinson, Extension marketing specialist at Texas A&M University. “But it was only clear evidence that the reserve offerings, whatever their quality, were not a value at that price.”

Dr. Robinson and other experts say the offerings could be at a more relevant base price such as 85 cents per pound, adjusted for quality, but add that remains to be seen. They do agree the timing of this year’s sales – before new crop enters the market – could be less disruptive than last year’s early summer auction.

China’s internal cotton price has been dropping due to the lower price of manmade fibers and the price of imported cotton, says Dr. Campiche.

“Back in February, China’s price was actually up closer to 90 cents per pound,” she said. Since then, it’s dropped so China’s price is now down to 81 cents per pound. Polyester prices right now are at about 46 cents per pound.

“While back in February cotton was about twice that of polyester, now the gap has narrowed a little bit, but it is still a pretty significant gap, and that gap is not allowing cotton mill use in China to recover.”