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China's cotton output likely to decline 10% this year
Apr '14
The production of cotton in China is likely to drop by about 10 percent this year, mainly due to the Government’s decision to end the cotton buying and storage policy, the latest official statistics show, reports cctv.com
For the last three years, the Government of China’s cotton purchase and storage policy assured that the benefits of cotton growers were protected, but from now on the returns that farmers would get on their produce would depend on market forces.
Government officials who surveyed China’s 13 main cotton production zones estimated that cotton sowing would reduce by about 10 percent this year, and accordingly they expect a fall in production by similar percentage, which would bring the country’s cotton production down to 6.1 million tons in 2014.
The decline in cotton sowing would be because the Government is replacing its cotton policy with a new one and some farmers would like to wait-and-watch, and hence, would choose to grow something else in the meanwhile, according to an expert.
The Government is withdrawing its cotton purchase and storage policy as it resulted in a price difference of about 4,000-5,000 yuan/ton between domestic cotton and imported cotton, causing cotton and cotton yarn imports to surge, as domestic textile mills found local cotton to be expensive.
Under the new policy, the Chinese Government will provide subsidy to farmers or textile mills, and would bring the prices of cotton in domestic market at par with prices in global markets.

Fibre2fashion News Desk - India

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