Home / Knowledge / News / Textiles / China to replace cotton storage with subsidies in 2014-15
China to replace cotton storage with subsidies in 2014-15
12
Mar '14
The Government of China is likely to stop its temporary cotton purchase and storage policy and implement subsidies to farmers for the 2014-15 cotton season across the country. In fact, the Government has already implemented subsidies on a pilot basis in the Xinjiang province.
 
The temporary purchase and storage policy was launched in 2011 by the Chinese Government to stabilize cotton prices in the domestic market, and to protect and increase enthusiasm of farmers towards growing cotton.
 
However, the policy failed to achieve an effective balanced protection, as it weakened the role of self-regulatory market mechanisms, leading to a huge difference between prices of cotton in domestic and international markets.
 
In 2011, about 3.13 million tons or about 47 percent of China’s national output was acquired for the state reserves. In 2012, the state bought 6.5 million tons or about 90 percent of the total cotton production. The state has not only borne the cost of buying cotton, but has also paid for its storage, resulting in a heavy financial burden on the national economy.
 
The Government’s policy, however, benefited some ginneries as the cotton was purchased after processing for the state reserves. Cotton processing enterprises purchased raw cotton from farmers at a lower price than the price paid to them after processing by the state reserves.
 
Moreover, the policy destroyed the main market supply and original trade environment. The difference in price of cotton between domestic market and international market was 1000 yuan per ton in September 2011, which increased to 6000 yuan per ton in 2013, resulting in the domestic cotton prices being about 45 percent higher than the international market. This seriously affected the stable operation of China’s textile industry chain, as well as the international competitiveness of its cotton textiles.
 

Fibre2fashion News Desk - India


Must ReadView All

Textiles | On 24th Jun 2017

Applied DNA to tag cotton for 2017/18 US ginning season

Applied DNA, provider of DNA-based supply chain security,...

Apparel/Garments | On 24th Jun 2017

NPD Group launches Trend Tracker for apparel trends

Global information company the NPD Group has launched Trend Tracker,...

Textiles | On 24th Jun 2017

Cotton USA’s first innovation competition in UK ends

Cotton USA has announced the successful close to its first innovation ...

Interviews View All

Manuj Terapanthi
Texaura

Transparent supply chain and fair trade will boost sustainable market

Anvita Mehra
Confidential Couture

‘It is going to take some time for Indian buyers to get accustomed to...

Giovanni Pizzamiglio, Paolo Crespi & Riccardo Robustelli
Epson, For.Tex & F.lli Robustelli

‘The percentage share of printing in the global textile market is pretty...

Larry L Kinn
Suominen Corporation

Larry L Kinn, Senior Vice President - Operations Americas of Suominen...

Lynda Kelly
Suominen Corporation

Suominen Corporation is a manufacturer of nonwovens as roll goods for...

Ashok Desai
Bombay Textile Research Association

Bombay Textile Research Association (BTRA) is a leading name in textile...

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

Sonam & Paras Modi
SVA

Sonam and Paras Modi's Sva Couture is synonymous with head-turning...

Mike Hoffman
Gildan Activewear SRL

Gildan Activewear, a manufacturer and marketer of branded clothing and...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

news category


Related Categories:
June 2017

June 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search