China Reserve: “We Need More Time to Reduce Inventory”

Hua Wei

When an official from China’s national cotton reserve speaks about its future plans, the entire cotton value chain listens. And on July 15 in New York, about 100 cotton and textile professionals gathered to hear those comments in person at a one-day conference entitled, “A Dialog on China’s Cotton and Textile Industry Evolution.”
Liu Hua, general counsel for the China National Cotton Reserve Corp. (CNCRC), wasn’t able to provide specifics to the one question everyone wants to know: What are China’s intentions regarding cotton, especially how and when it will reduce its massive stocks? But he did provide some general guidelines, as well as some insights about CNCRC’s business development plans.

About the size of the reserve. China currently has a 163% stocks-to-use ratio and is estimated to have 63% of the current world reserves. When asked from an audience member what CNCRC considers the “optimum levels” of its stocks, Hua replied, “The current state of affairs is abnormal. We are trying to reduce inventory but need more time. Consumption needs to be increased, as more and more farmers become city dwellers.
“But we don’t want cotton production to decrease too quickly. Personally, I feel it will take at least three more years before we have better consumption to use ratios.”

About its business development plans. Hua says that CNCRC is growing steadily and will focus on increasing its capabilities in three primary areas:  

  1. Maintaining optimum stocks of cotton (via a combination of domestic production and imports),
  2. Improving internal technological and management capabilities, and
  3. Increasing efficiency of distribution via warehousing & distribution.

Hua said CNCRC will create a dedicated logistics company “in near future,” which will oversee cotton storage and transportation. China currently relies heavily on railroads to get fiber from the production areas in the northwest to the mills in the east, but the intention is to increase the use of highways for better flexibility.
At the end of his presentation, Hua said CNCRC pledges to be more transparent and open in its operations. He was followed by speakers from USDA, Bayer CropScience, Bhadresh Trading, Xingjiang West Yinli Cotton Industry Group Co,  Hebei Spring Textiles Co., Henan Tongzhou Cotton Trade Co., Ltd., the Tianjin Cotton Exchange Market, and R.J. O’Brien. The event was organized by the IntercontinentalExchange (ICE) and CNCRC, with support from the China National Cotton Information Center (CNCIC).

The conference will be covered in greater detail in The China Report in Cotton International’s Q3 issue, which will be available in September.

Leave a Reply

News Stories
News

Registration, Meeting Info for 2017 Beltwide Conferences Now Online

September 30, 2016

Information about registration and hotel reservations for the 2017 Beltwide Cotton Conferences in Dallas is now available on the conference website.

News

Sale of Nation’s First Cotton Bale Helps Fund Scholarships

September 27, 2016

The sale of the nation’s first cotton bale for 2016 provided $16,500 in scholarship funds for agriculture students in the Harlingen, TX area.

Product News

Cotton Board Releases 2015 Annual Report

September 27, 2016

The Cotton Board’s 2015 Annual Report is now available online.

Product News

It’s a Deal: Bayer to Acquire Monsanto

September 14, 2016

Bayer and Monsanto have announced an agreement under which Bayer will acquire Monsanto for approximately $66 billion in an all-cash transaction.

News

NCC Urges Broad Look at Global Fiber Markets

September 14, 2016

The National Cotton Council is seeking greater transparency of fiber production policies in other countries – including synthetic fibers – to help determine how they impact the global cotton market.

Product News

How Fiber Quality Became So Valuable

September 14, 2016

Textile expert Dean Etheridge explains the meteoric rise of fiber quality on the global market.

News

Cotton Highlights from September WASDE Report

September 12, 2016

Production and ending stocks are up slightly in USDA’s September World Agricultural Supply and Demand Estimates, while export and consumption numbers remain steady.

Around The Gin
Product News

Cotton Board Releases 2015 Annual Report

September 27, 2016

The Cotton Board’s 2015 Annual Report is now available online.

Product News

It’s a Deal: Bayer to Acquire Monsanto

September 14, 2016

Bayer and Monsanto have announced an agreement under which Bayer will acquire Monsanto for approximately $66 billion in an all-cash transaction.

Product News

How Fiber Quality Became So Valuable

September 14, 2016

Textile expert Dean Etheridge explains the meteoric rise of fiber quality on the global market.

Product News

Cotton Cultivated Website Adds Custom Weather Feature

September 1, 2016

Cotton Cultivated – Cotton Incorporated's producer information website – now features a new weather tool tailored for cotton growers.

Product News

ChemChina/Syngenta Deal Gets U.S. Foreign Investment Approval

August 22, 2016

ChemChina and Syngenta have received a key clearance for the proposed consolidation of the companies.

Product News

Enlist Cotton Trait Earns Full Export Approval

August 10, 2016

Cotton varieties containing Dow AgroSciences’ Enlist trait now have full export approval in key countries.

Product News

Spray Equipment Offer Helps Maximize On-Target Applications

August 3, 2016

A new spray technology equipment offer can help growers participating in Roundup Ready PLUS Crop Management Solutions upgrade their sprayers to maximize on-target applications.

Product News

EPA Allows Sale and Use of Existing Belt Inventory

August 2, 2016

The U.S. EPA’s Environmental Appeals Board has upheld an earlier decision to cancel registration for Bayer's insecticide Belt, but is allowing sales of existing stocks to growers for use.

Latest News
News

Registration, Meeting Info for 2017 Beltwide Conferences Now Online

September 30, 2016

Information about registration and hotel reservations for the 2017 Beltwide Cotton Conferences in Dallas is now available on the conference website.

News

Sale of Nation’s First Cotton Bale Helps Fund Scholarships

September 27, 2016

The sale of the nation’s first cotton bale for 2016 provided $16,500 in scholarship funds for agriculture students in the Harlingen, TX area.

News

Proposed Mergers Could Increase Cotton Seed Prices

September 23, 2016

According to a Texas A&M study, proposed mergers by leading biotechnology firms would result in steep price increases for cotton seed and smaller increases for other grain crops.

News

Ag Companies Defend Merger Deals on Capitol Hill

September 21, 2016

Officials for Monsanto, Bayer and other ag companies defended their proposed merger plans before the Senate Judiciary Committee, insisting that the deals would mean greater investments in technology to help American farmers.

News

NCC Urges Broad Look at Global Fiber Markets

September 14, 2016

The National Cotton Council is seeking greater transparency of fiber production policies in other countries – including synthetic fibers – to help determine how they impact the global cotton market.

News

Cotton Highlights from September WASDE Report

September 12, 2016

Production and ending stocks are up slightly in USDA’s September World Agricultural Supply and Demand Estimates, while export and consumption numbers remain steady.

News

Wet Conditions Causing Problems for Texas Cotton

September 9, 2016

Extended untimely rains have producers in Texas’ Upper Gulf Coast and Blacklands worried about yields and lint and seed quality.

News

Boosting the Value of Cottonseed

August 30, 2016

As cottonseed supply and value grows, the cotton industry continues to fight for the oilseed designation or other legislative options.

News

New Webcast Focuses on Importance of Cotton Physiology

August 26, 2016

A new webcast focusing on the importance of plant properties in cotton research and management has been added to the Focus on Cotton online series from the Plant Management Network and Cotton Incorporated.

News

New Webinar Explains Soil Fertility and Nutrient Management

August 23, 2016

A new webcast on cotton fertility management has been added to the Focus on Cotton online series from the Plant Management Network and Cotton Incorporated.

News

Cotton Research and Promotion Hall of Fame Adds Four

August 22, 2016

Four honorees make up the 2016 class of Cotton Incorporated’s Cotton Research and Promotion Hall of Fame.

News

New Webcast Focuses on Auxin Herbicide Drift on Non-Tolerant Cotton

August 19, 2016

A new webcast explaining the potential impact of 2,4-D on non-tolerant cotton varieties has been added to the Focus on Cotton online series from the Plant Management Network and Cotton Incorporated.

News

Cotton Highlights from August WASDE Report

August 12, 2016

More positive news for cotton in USDA’s August World Agricultural Supply and Demand Estimates, including increases in U.S. production and market prices, plus more reductions in global stocks and world production.

News

$1 Billion in Dividend Payouts for FCC

August 9, 2016

With its 2016 dividend payout, Farmers Cooperative Compress of Lubbock will reach the unprecedented milestone of having distributed $1 billion to its producer-owners.

News

Final P.I.E. Tour Brings Western Growers to Texas

August 8, 2016

Eight Western cotton producers will visit cotton and other ag operations in Texas as part of the National Cotton Council’s 2016 Producer Information Exchange Program.