China : No more low cotton price era

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No more low cotton price era

20
Jun '11

China's national cotton acreage has reached 81.00 million Mu in 2011 (one hectare = 15 Chinese Mu), an increase of 5.2 percent over the previous year, according to the latest forecast.

“We will harvest a good cotton crop, if there is no devastating natural disasters in the next few months and it is expected that, cotton output will not be lower than the previous year”, said, Vice-President of the China Cotton Association, Gao Fang recently at the International Cotton Conference - 2011.

China is the world's largest cotton producer and cotton consumer. Cotton industry has a long textile industrial value chain with many players. Cotton price trends, not only affects the interests of farmers, but also impacts downstream textile and garment enterprises.

The conference noted that, the low price era for domestic cotton has gone, due to increased costs and support of minimum support prices.

Data from China Cotton Association reveals that China Cotton Index (CC Index328) stood at 24,513 Yuan / ton on June 16, down 20 percent from the high point hit in March this year.

In the 2010/11 cotton year, cotton price soared to a record high, then, rapidly declined. This fast pace and speed in price fluctuations has rarely been seen in history.

China's average cotton acreage has been 78.21 million Mu (5.214 million hectares) per year in recent 10 years and the average output has stood at 6.23 million tons, accounting for about 30 percent of global production.

China's status as the biggest cotton producer and consumer will not fundamentally change in the next five to ten years as cotton production still has high growth potential.

On consumption side, with rising purchasing power in rural areas, demand growth in domestic markets will further increase. At the same time, China's textile and garment exports will continue to maintain certain growth.

Fibre2fashion News Desk - China

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