NRDC to review cotton procurement plan
November 21, 2008 - China
The National Development and Reform Commission said on November 20, that the state has started an emergency cotton procurement plan. According to the plan, the state will increase procurement amount by 1 million tons for national cotton reserves, the implementation of which has already started on October 29, to control fall in domestic cotton prices.
Impacted by adverse factors affecting the textile industry such as tight capital and poor export performance, domestic cotton purchase prices continued to drop in October. The progress rate of procurement was also slower than previous year. After purchasing 220,000 tons of Xinjiang cotton between October 21 and 24, relevant departments began to carry out the procurement plan of purchasing another 1 million tons of cotton from October 29.
As of the end of October, the provisional procurement totaled to 54,000 tons which also received positive response from cotton enterprises. Under the influence of the procurement, cotton purchases in domestic markets improved and the rate of fall in cotton prices was arrested and started showing stability.
The National Development and Reform Commission said that once the current procurement plan is completed by two-thirds, the commission will study how to further increase temporary procurement amount, if cotton price in the market continues to decline.