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Drought conditions throughout China have destroyed 665000 hectares and affected 6.7 million hectares of crop over the past three months, according to a report Thursday By Xinhua. Chongqing and Sichuan have reported the worst drought conditions in 50 years. Mulberry trees in the regions also suffer serious weather problems. As a result, the autumn cocoon output in Sichuan and Chongqing is estimated to drop dramatically. Meanwhile, some silk mills in the regions have to be shut down due to high temperature, power and water supply factors. On the other hand, corresponding silk product demand condition expectation lends some uncertainty to price activity.

Electronic prices are sensitive to weather situation and go up this week. Sept. Dried Cocoon and Raw Silk closed at 77800 yuan and 23180 yuan per ton respectively with decreased anticipated delivery volume. Electronic price, especially dried cocoon price has a strong historical tendency to reflect weather factor.

Corresponding to the active electronic market, CCSE spot prices are steady amid quiet and shows higher compared to those of last week. Trading volume is moderate.