Frequently Asked Questions

1.Q: What is “imported cotton online supermarket transaction and delivery”?
A: Imported cotton online supermarket transaction and delivery refers to a way of trading and delivery where the seller releases “the selling invitation” and the buyer releases “the buying invitation” via the online supermarket trading system of China National Cotton Exchange (Hereinafter referred to as “CNCE”) . After they reach an agreement through the online supermarket trading system and receive the confirmation of CNCE, both sides should complete the exchange of the goods or that of the payment for goods with documents representing title within the time limit set in the e-contract.
2.Q: What are the requirements for cotton enterprises before entering into import cotton online supermarket trading system?
A: Seller in this Approach means a cotton enterprise registered beyond the territory of the People’s Republic of China and kept in record at the General Administration of Quality Supervision, Inspection and Quarantine of the People’s Republic of China(AQSIQ) (Type A enterprise), or a CNCE membership which is registered within the territory of the People’s Republic of China (Type B enterprise). Enterprises on the default list of International Cotton Association (ICA) or China Cotton Association ( CCA)are not allowed to enter the trading system.
3.Q: How can the seller release the “selling information” on imported cotton via online supermarket trading system?
A: For Bonded Cotton, the Seller needs to store it in a bonded delivery (supervision) warehouse designated by the CNCE, signs up for the Bonded Cotton warehouse receipt, and then releases information on selling imported cotton through the imported cotton online supermarket trading system; for Forward Shipment Cotton, the Seller needs to pass the CNCE qualification verification before releasing the information on selling imported cotton via the imported cotton online supermarket trading system. If the seller is type A enterprise has a business office (or a branch) which is one of CNCE’s registered memberships in China, and presents the power of attorney in written to its business office (or a branch), the business office (or the branch) may release “the selling invitation” directly. On the other hand, if the any of type A enterprises does not have a business office (or a branch) in China needs to release “the selling invitation”, the seller is required to demonstrate the power of attorney in written indicating CNCE has the authority to release “the selling invitation”. The seller needs to provide the selling information and quotation price to CNCE.
4.Q: For Bonded Cotton not store it in a bonded delivery (supervision) warehouse designated by CNCE, how to submit “the selling invitation”?
A: First, the seller needs to provide CNCE with the title to goods issued by the warehouse. Second, CNCE should verify the information provided by the seller. Then the seller could release “the selling invitation”.
5.Q: After submitting the quotation, can the seller/the buyer adjust their quotation timely?
A: Before the transaction is concluded, the seller/the buyer may adjust or cancel any unmatched “selling invitation”/ “buying invitation” at any time through the online supermarket trading system.
6.Q: What is the standard of collecting the margins and a commission charge from the seller/the buyer?
A: When the buyer’s quotation is lower than the seller’s quotation, no margins will be collected from the buyer; when the buyer’s quotation is equal to or higher than the seller’s quotation, CNCE will provisionally withhold the buyer’s margins at the standard of 1,000 yuan/ton; when the seller adjusts its quotation which makes its quotation lower than the buyer’s offer, the margins will be provisionally collected from buyer’s at the standard of 1,000 yuan/ton as well. The transaction cannot be concluded if the buyer’s margins is less than enough to be deducted at the standard of 1,000 yuan/ton, but only concluded after the buyer makes up for the margins upon system notification.
To ensure the seller’s implementation the contract and normal compensation for CIQ claim, an amount of margins will be collected from the seller at the standard of 1,000 yuan/ton; for Bonded Cotton which has been placed under the supervision of CNCE, after the seller applies for offsetting part of the margins with the warehouse receipt, an amount of margins will be collected from the seller at the standard of 300 yuan/ton.
After an online supermarket transaction is concluded, no transaction cost will be collected from the seller, but a commission charge will be collected by CNCE from both sides at the standard of 20 yuan/ton and such amount will be deducted and transferred from the margins account.  
7.Q: Is the seller/the buyer anonymous while trading via the online supermarket?
A: Before receiving the “Transaction Confirmation Notice”, the seller/the buyer is anonymous. The seller/the buyer could provide a list to CNCE in advance informing CNCE the enterprises they do not want to run business with. This list will automatically be added into the default list of ICA or CCA existed before to suspend any trading. Once the trading has started, the seller/the buyer is anonymous.
8.Q: How could the seller/the buyer receive the “Transaction Confirmation Notice”? Should the seller/the buyer keep eyes on the trading system all the time? Does the “Transaction Confirmation Notice” have legal effect?
A: The seller/the buyer should not keep eyes on the trading system all the time, and will receive the “Transaction Confirmation Notice” by means of system notice、E-mail、and SMS message. Generation of the “Transaction Confirmation Notice” has legal effect, and shall be viewed as the confirmation of the transaction, after both sides reach the stage of signing before fulfilling a contract.
9.Q: How could the seller present the “Special Terms” before generating the e-contract via trading system?
A: The seller needs to present “Special Terms” while releasing “the selling invitation” for the buyer’s choice. If the “Special Terms” has been confirmed by the buyer, it should automatically be a legally integral part of the formal e-contract.
10.Q:How could the buyer apply to check the cargo in bonded warehouses? Who has the authority to issue “the statement of checking the cargo”?
A: The seller/the buyer clicks “the application of checking the cargo” in the online supermarket trading system, and submits the information of the persons who will actually go to warehouses. The Exchange, after verifying the information and arranging with the warehouse, will inform the seller/the buyer the location and the contact person of the warehouse.
11.Q: If the seller and the buyer are both type B enterprises (CNCE memberships which are registered within the territory of the People’s Republic of China), how to settle accounts between them?
A: In the event that type B enterprises conclude a transaction, yet the buyer and the seller cannot make payments for the reason of settlement, CNCE may provide agent settlement service for them. The commission charge will be collected by CNCE from the buyers at the standard of 0.25 us cent/pound more added into the transaction price.
12.Q: If the seller has confirmed the price with the buyer, according to the changes in price quotations, the seller/the buyer fails to sign and confirm the e-contract after receiving the “Transaction Confirmation Notice”, how to deal with this situation?
A: Within the period of validity of the quotations made by both sides, a transaction will be closed if the buying price offered by the buyer is higher than or equal to the selling price offered by the seller, and the system will automatically produce a “Transaction Confirmation Notice” to both sides, and willgenerate an e-contract for the seller and the buyer to sign within 5 working-days. Even if both sides fail to sign the contract except providing an explanation on contract processing confirmed by both sides in written to CNCE, the generation of the “Transaction Confirmation Notice” shall be viewed as the confirmation of the transaction, and both sides need to fulfill the transaction as stipulated in the contract. In the event that one side or both sides fail to implement the contract, it should be viewed as a defaulting behavior. In this circumstance, CNCE will deduct a penalty from the defaulting party’s account of margins and transfer the sum to the other party.
13.Q: How could CNCE ensure the implementation of the seller/the buyer via online supermarket trading system?
A: First, Buyers and sellers engaged in CNCE’s imported cotton online supermarket transactions are required to deposit, before the transaction, a certain amount of money in the account designated by CNCE as the margins. If one party takes the default behavior, CNCE will deduct a penalty from the defaulting party’s account of margins and transfer the sum to the other party after CNCE’s verifying and confirmation. Second, following the principles of “openness、fairness、impartiality”, CNCE, as the only comprehensive serving platform approved by Central Government, will evaluate our memberships’ records. According to the records, CNCE will restrict the defaulting party’s trading or relevant business in CNCE, which might have negative influence on its evaluation and future business not only in CNCE also in the whole cotton industry.
14.Q: Which index is considered as the standard of adjusting the margins from the seller/the buyer?
A: The online supermarket will refer to the COTLOOK A Index as the standard.
15.Q: How to make the compensation due to the deferred loading or the deferred opening L/C.?
A: The seller/the buyer needs to add the compensation standard into the “reference” while releasing “the selling invitation” or “the buying invitation” with the exception of force majeure. If the seller/the buyer fail to present the compensation standard, both sides need to negotiate over the settlement.
16.Q: Could the seller/buyer apply for the third-party inspection when they are not satisfied with the CIQ reports?
A: The quality and weight of Forward Shipment Cotton shall be subject to the CIQ quality and weight inspection certificates, and the buyer shall lodge a claim against the seller based on the CIQ certificates in accordance with relevant Chinatex Cotton Purchase Contract Terms. Should any party have any objection against the CIQ report, it may apply for the reinspection according to the Rules of the Resinspection for Import and export commodity by No. 77 of AQSIQ, and make the settlement by negotiation.


中国棉花信息网