The A-Index of world cotton prices (the yellow line) generally parallels ICE cotton futures (the green line) at a premium.  China’s internal cotton price (the blue line) is higher than world prices, and the spread has been widening from a rising Chinese market.

The big remaining fundamental questions include:

1) What sized reserve will China maintain for the long-term?

2) What is their policy for rotating that reserve inventory?  Will the major purchases for the reserve in 2020 continue in 2021?  The answer to this question appears to be yes, with sales of older inventory and new inventory purchases having begun in July, 2021.

3) Are the Chinese expanding their reserve, i.e., stockpiling for an anticipated future shortage?