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Slowdown in exports results in grim outlook for cotton

09 Feb '09
2 min read

The "2009/2010 Annual Economy Report on China's cotton production" predicts that China's 2009/10 cotton production index will stand at 250 points, down 45 points from the 295 points of the previous year along with China's cotton yarn production likely to show zero or negative growth in 2009.

There has still not been a turnaround in the poor cotton consumption of the last few months and it is still finding it difficult to find a firm price footing and has not been able to register any significant gains, despite the state carrying out several rounds of procurement.

The main beneficiaries of the cotton procurement scheme of the government have been the brokers and traders rather than the farmers, who sell their crop to ginners and traders at low prices and who in turn reap the gains of the procurement schemes of the government.

Going by the present situation, although the Government has raised export tax rebate rates and conducted several rounds of cotton procurement, macro-economic situation is still uncertain, exports are still encountering slowdown in the global markets, leading to lower cotton off take.

The effects of the slowdown on the export front are clearly visible in the reduced cotton consumption of the last few months and it is expected to face numerous challenges and variables, due to which the outlook and future of the cotton markets is not so optimistic.

Fibre2fashion News Desk - China

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