The Government of China will not increase its cotton import quota next year beyond 894,000 tons that it had promised while joining the WTO, Liu Xiao, deputy director, Economic Division, National Development and Reform Commission (NDRC) has said.
Addressing a press conference along with NDRC deputy director Zhou Wang Jun, Liu Xiao said the NDRC will guide domestic textile enterprises to use more homegrown cotton next year.
The Government of China had earlier this year abandoned its temporary cotton purchase and storage policy and introduced a target price system, under which farmers will receive subsidy if the market price falls below the preset target price of 19,800 yuan per ton.
At present, the price of ginned cotton in the Chinese market is quoted at about 14,000 yuan per ton, while the price on the benchmark US futures market is about 11,800 per ton.
The difference in cotton price between the Chinese market and the global market will narrow down to a reasonable range, which would lead to a reduction in imports of cotton yarn, Liu said.
China’s domestic cotton production is likely to decrease this year by around 500,000 tons to 6.5 million tons. On the other hand, the demand is expected to stay around 8.5 million tons. (RKS)
Fibre2fashion News Desk - India