Chinese Gins Purchasing; Farmers Considering Shift to Grains

By Jim.Robinson|September 10, 2012

While it’s a good thing that growers in China are finally realizing income from their crop, but the amount they’re receiving has many of them considering a shift to a different crop next year, according to Beijing-based Galaxy Futures.

Ginners in Kuntun – a cotton-producing, autonomous region in Xinjiang in China’s northwest – have started purchasing seed cotton, but the current price of 63 cents/lb is higher than the gin owners expected. At the same time, growers think the price is too low, so no one is very happy about that situation. On the bright side, however, ginners are pleased with the quality of the cotton they’re getting, especially the moisture content of the cotton picked at this early stage.

Meanwhile, heavy rains that fell in late July and early August in Dezhou, a city in the northwestern Shandong province, have damaged both overall cotton production and quality. Yield for seed cotton is expected to drop about 10% to 3.45 metric tons/hectare. Sources add that the percentage of Grade 3 cotton will drop from 40% to 20%, with higher percentages of Grade 4 and Grade 5.

Prices remain a concern for growers. Grade 4 cotton with 37.5% lint and 18% moisture is being purchased at 59 cents/lb to 61 cents/lb, which is low enough to prompt many growers to shift their crops to grains next year, according to the Dezhou Cotton Association.