While cotton imports flow into China at an increasing rate, the
nation's cotton farmers this spring are expected to increase their
growing acreage to 5.6 million hectares, hoping to cash in on the
domestic market's consistently high prices.
China, the largest cotton buyer in the world, is expected to get
1.5 million tons of imported cotton this year. But the imports are
unlikely to hurt local cotton farmers, said Gao Fang,
secretary-general of China Cotton Association.
"Although imported cotton is cheaper, cotton produced in China
is of a better quality," she said.
The China Cotton Association surveyed 22,283 farmers in 13
provinces and municipals across the country, and found that many
are encouraged by purchasing prices of textile spinners and intend
to grow more cotton than last year.
Wang Dingwei, head of the cotton farmer cooperation branch under
the association, said that as long as there were no big reductions
in cotton prices in the next two months, "the growing acreage will
increase by what we expected."
The growth in acreage reflects an increase of 9.4 percent from a
year ago.
According to the association's survey, textile makers can afford
to pay 500 yuan (US$62.5) more for every ton of cotton grown in
China.
The cotton price of spot transactions stood at 18,000 yuan
(US$2,250) per ton earlier in 2004 but dropped to about 12,000 yuan
(US$1,500) per ton last sowing season.
Last year, due to a significant price drop, China's cotton
growing acreage shrank about 0.67 million hectares, or around 10
percent from 2004.
According to the latest statistics published by the National
Statistics Bureau, China's output of cotton stood at 5.7 million
tons last year, nearly 10 percent, or 620,000 tons, lower than in
2004.
Since the decade-long export quota mechanism was removed from
global textile trade at the beginning of last year, Chinese textile
manufacturers have largely increased their demand for cotton-made
material, expecting a larger chunk in the overseas market
share.
Cotton prices have bumped up to 15,000 yuan (US$1,875) on
growing demand.
To match the gap between demand and domestic supply, the country
imported 2.57 million tons of cotton in 2005.
The National Development and Reform Commission last September
issued 894,000 tons of cotton import quotas.
Gao said in recent years some cotton farmers had cotton
stockpiled till March, holding out for better prices rather than
being pressured by imported cotton.
"The government usually issues the import quotas for cotton
after most domesticcally produced cotton has been purchased," Gao
said.
China is implementing a sliding tariff on imported cotton. The
mechanism keeps the imported cotton price not much lower than
domestic cotton.
There are 130 million cotton farmers scattered across the
country and most of have small production-scale operations.
"Domestic cotton farmers often feel confused about the market,"
Gao said. "We keep talking to them about price, supply and
sales."
Gao said some training bases would be established to showcase
newly developed cotton species and growing technologies to improve
average production.
(China Daily March 9, 2006)