The Long Reach of China’s Cotton Policy

Since the Chinese government announced a lower starting auction price in early April, the pace of sales from China’s reserve increased, and the Type 328 China Cotton Index (a daily index of prices for domestic cotton offered to mills in China) fell from this season’s nine-month average of 144 cents/lb. to about 129 cents/lb.

Although lower cotton prices are welcomed by the mills in China, a lot of damage has been done to the industry in the past few years by the Chinese government’s cotton policy. Since the start of its reserve policy in 2011, mill consumption has declined by 17 percent, from 9.6 million tons in 2010/11 to 7.9 million tons in 2013/14. In 2014/15, the decline in consumption in China is expected to slow, falling by just one percent to 7.8 million tons. However, the next three largest consumers – India, Pakistan, and Turkey – are all expected to see growth in their mill use in 2014/15.

World consumption in 2014/15 is expected to reach 24.3 million tons, an increase of three percent in comparison with the previous year.

While world mill use is expected to increase in 2014/15, world production is forecast to decline by two percent to 25.2 million tons, narrowing the gap between world production and consumption. In 2014/15, India is expected to produce nearly 6.3 million tons – a decline of two percent due to the expectation that the monsoon weather will not be as favorable as in 2013/14.

Most of the decline in world production will occur in China. Production is expected to decline by 10 percent from 6.7 million tons in 2013/14 to 6 million tons in 2014/15, as the Chinese government has restricted its support for cotton to just the Xinjiang region. Any production outside that region is expected to fall significantly.

World trade is expected to decline in 2014/15 to 8.2 million tons from 8.7 million tons forecast for 2013/14. As with production, this decline stems mostly from China, where imports in 2014/15 are expected to be 2.2 million tons – down 30 percent from 2013/14 and 60 percent from its peak of 5.3 million in 2011/12. However, China’s decline will be partially offset by imports from Bangladesh, Indonesia, and Vietnam, which are expected to import a total of 2.4 million tons in 2014/15 – an increase of 13 percent from 2013/14.

 

Source – International Cotton Advisory Committee

Topics:

Leave a Reply

International Stories
International

Indian Cotton Situation Currently Stable

March 17, 2017

The cotton situation in India from both producers’ and users’ points of view seems to be stable.

International

Innovations in Nonwovens Focus of International Conference

February 22, 2017

The Technical Association of Pulp and Paper Industry will hold its Innovative Nonwovens Conference (NETInc) April 23-26 in Minneapolis, MN.

International

Indian Cotton Crop Estimated at 34.1 Million Bales

January 24, 2017

India is estimated to produce 34.1 million cotton bales during the season ending September 2017.

International

Steady Rise in Indian Cotton Prices

January 23, 2017

While global cotton production is increasing, the cotton situation in India is getting serious attention due to a steady rise in prices.

International

Indian Cotton Association Opposes Stockpiling Program

October 27, 2016

The Cotton Association of India is opposing the creation of a cotton stockpiling program for the country.

International

India: Higher Production on Less Acreage as New Season Begins

October 25, 2016

India’s Cotton Advisory Board is estimating 35.1 million bales of cotton production in the country during the new growing season that began October 1.

International

Reinhart Named New ICA President

October 25, 2016

The International Cotton Association named its 2016-17 leadership team – headed by President Jürg Reinhart – during the organization’s annual general meeting in Liverpool.

Around The Gin
Product News

BASF Expands Dicamba Manufacturing Facility

March 22, 2017

BASF has completed a $270 million expansion of its Beaumont, TX, facility – the largest agricultural products facility investment in company history.

Product News

Topguard Terra Label Amendments for Cotton Root Rot in Texas

March 7, 2017

Texas growers now have additional preplant and post planting options for using Topguard Terra to control cotton root rot.

Product News

Advanced Traits from PhytoGen Protect Yield and Quality

March 6, 2017

PhytoGen varieties offer more and better in-plant, native trait protection to help cotton thrive, protect quality and optimize yields.

Product News

Six Greenleaf Nozzles Approved for Use with XtendiMax

February 24, 2017

Six TurboDrop D Series nozzles from Greenleaf Technologies have been approved for use with Monsanto’s XtendiMax herbicide with VaporGrip Technology.

Product News

EPA Approves DuPont’s FeXapan Dicamba Herbicide

February 17, 2017

DuPont has received EPA registration for FeXapan herbicide plus VaporGrip Technology, a low-volatility dicamba formulation for use on cotton and soybean varieties carrying traits that provide tolerance to dicamba and glyphosate herbicides.

Product News

Fourteen Southern States Register Enlist Duo for Use on Enlist Crops

February 14, 2017

Fourteen Southern states have granted state registration of Enlist Duo herbicide for use on Enlist cotton and other crops, following federal registration received in January.

Product News

BASF Application Academy Adds Online Training Module

February 2, 2017

BASF has added an online training module to its On Target Application Academy stewardship program to help increase education of new and advanced herbicide technologies.

Product News

Bayer Offers Shared Risk Program for FiberMax, Stoneville Growers

January 26, 2017

Bayer is helping support the economic sustainability of cotton growers through the company’s 2017 Shared Risk Program for those who plant FiberMax and Stoneville cotton seed.

Latest News
International

Indian Cotton Situation Currently Stable

March 17, 2017

The cotton situation in India from both producers’ and users’ points of view seems to be stable.

International

Enrollment Open for Texas International Cotton School

February 28, 2017

Registration is open for the 37th session of the Texas International Cotton School, scheduled for August 7-17 in Lubbock.

International

Indian Cotton Consumption to Increase Slightly

February 22, 2017

The Cotton Association of India now expects domestic consumption and imports of cotton to be higher than originally estimated.

International

Innovations in Nonwovens Focus of International Conference

February 22, 2017

The Technical Association of Pulp and Paper Industry will hold its Innovative Nonwovens Conference (NETInc) April 23-26 in Minneapolis, MN.

International

Indian Cotton Crop Estimated at 34.1 Million Bales

January 24, 2017

India is estimated to produce 34.1 million cotton bales during the season ending September 2017.

International

Steady Rise in Indian Cotton Prices

January 23, 2017

While global cotton production is increasing, the cotton situation in India is getting serious attention due to a steady rise in prices.

International

Indian Cotton Association Opposes Stockpiling Program

October 27, 2016

The Cotton Association of India is opposing the creation of a cotton stockpiling program for the country.

International

India: Higher Production on Less Acreage as New Season Begins

October 25, 2016

India’s Cotton Advisory Board is estimating 35.1 million bales of cotton production in the country during the new growing season that began October 1.

International

Reinhart Named New ICA President

October 25, 2016

The International Cotton Association named its 2016-17 leadership team – headed by President Jürg Reinhart – during the organization’s annual general meeting in Liverpool.

International

Could Blockchain Transform International Cotton Trade?

October 24, 2016

A recent cotton shipment processed and executed using blockchain – the technology that drives bitcoin – could represent a big breakthrough for international cotton trade.

International

Indian Textile Industry Seeks Cotton Stability Support

October 3, 2016

The Indian textile industry has asked the government to provide a support mechanism to counter high volatility in cotton prices.

International

Next Year’s Indian Cotton Crop to Remain Flat

August 30, 2016

The Indian cotton crop for the next season beginning in October is expected to remain at the same level as the current year.

International

Indian Government to Sell Cotton Stock

July 18, 2016

The Government of India has directed the Cotton Corporation of India to sell its entire cotton balance stock to offset the abnormal price rise.

International

Indian Spinning Association Works to Calm Current Cotton Situation

July 15, 2016

The Southern India Mills’ Association has called for calmness among spinners in India in the wake of the country’s downward cotton production estimate.

International

Indian Cotton Production to Decline

July 14, 2016

The Cotton Advisory Board of India has revised its estimate for this year’s cotton supply and demand situation in India, placing production at its lowest total in five years.