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Cotton information JV to give market clues
By Zhang Jin (China Daily)
Updated: 2004-08-23 10:49

China's cotton information market is gaining investors' attention, as two joint ventures (JVs) have been set up in the sector in the past two months.

Cotlook Ltd, the world's leading cotton and textile market information provider, and two Chinese partners established a joint venture in Beijing recently, the country's second joint-venture cotton information firm.

Beijing Cotton Outlook (BCO), as the JV is named, was created by Cotlook, China Cotton Association (CCA), the umbrella organization of the Chinese cotton industry, and the China National Cotton Exchange (CNCE), the body responsible for spot auctions of government reserves and e-trading for forward delivery.

The JV will provide international and domestic market information and analysis through a range of products from web-based services to a hard copy trade journal, said Fang Yuan, an official with the BCO.

"It will also offer consultancy services for Chinese cotton and textile industry participants," Fang told China Daily.

The BOC will be developed from existing resources of the CNCE's information bureau, which already has a well established website, therefore giving the joint venture a head start.

The JV is still in a beginning stage and might appear inactive, said Gao Fang, the CCA's secretary-general.

Its activities will become more prominent from September after it fully launches products and services, Fang said. He said he believed the JV was a win-win combination between Cotlook's experience and expertise in the international market and the two Chinese partners' knowledge on the local market.

The parties concerned would not divulge information about the total investment and shareholding in the firm.

Gao only said that her association had the smallest stake in the company, without giving a specific figure.

Cotlook's development into China takes place as Chinese cotton growers, collectors and consumers are in increasing need of international and domestic cotton information.

The need is all the more pressing since China's cotton industry is greatly integrated into the global market, and domestic cotton prices are subject to the market instead of State direction or instruction, Gao said.

And steep slumps in cotton prices in the last quarter of 2003, which led to great losses for textile companies, also made them unprecedentedly keen on obtaining timely information.

Under these conditions, "competition for the cotton information market has accelerated among Chinese information agencies."

Foreign cotton firms also don't want to lose such a big market and they are gathering momentum in tapping it.

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