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Cotton acreage expected to fall 18% in new season
Feb '09
Chinese cotton acreage has all along stayed more or less stagnant at around 80 million Mu (one hectare equals 15 Chinese Mu) 1951 onwards, but production has increased drastically, thanks to higher and increased yields.

Since entering the WTO ambit, China's textile industry has realized an unprecedented development which has led to a formation of clusters and industry chains strategically dependent on each other with all support facilities.

This astounding growth and development in the textile industry led once more to a shortage of domestically grown cotton, which once again forced China to import large quantities of cotton to feed the overgrowing appetite of its textile mills in 2007.

However, with the unfolding of the American sub-prime loan crisis, the global economy has rapidly plunged into recession, which drastically reduced demand for textile and apparels and in turn for the white gold.

According to USDA data in January this year, China's cotton output is expected to be 7,947,000 tons in the current cotton season of 2008-09, the second highest in history, while the annual consumption will be 10,560,000 tons.

But with shrinking demand for textiles, it automatically led to slowdown in demand for cotton, which affected prices of cotton to a large extent in 2008, leading to massive losses for the cotton farmers.

This development in 2008 and with the recessionary trends expected to be around till the end of this year, the farmers may contemplate growing other agricultural cash crops, rather than take a risk by growing cotton in the next cotton season.

This is expected to bring a multiplier effect on the supply of domestic cotton, which may once again lead to the era of shortages, wherein the country had to import huge imports of cotton in the past.

According to a research study on intentions of farmers to plant cotton seeds in the new season, cotton acreage is expected to drop by 18 percent. The years which have witnessed a decline in excess of 18 percent are 1961, 1985 and 1993.

Fibre2fashion News Desk - China

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