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

First Estimate of New Season Indian Cotton Crop Released

August 25, 2015

The Indian cotton crop for the new season beginning this October is estimated to be 38 million bales (170 kilograms each).

International

China ELS Crop Could Triple

August 31, 2015

China’s production of extra-long staple cotton for 2015/16 could be three times the size of last year’s crop, thanks to new incentive programs tied to market prices.

International

Pakistan Taking the Fight to Cotton Leaf Curl Virus

August 19, 2015

Pakistani officials are working to ramp up efforts in the country’s on-going battle with cotton leaf curl virus.

International

Leading Global Economist Set for ICA Trade Event

August 14, 2015

Todd Buchholz, a leading expert on the U.S. and global economy, will share his thoughts on global politics and economics during the International Cotton Association’s (ICA) “San Francisco 2015” trade event in late October.

International

Stephen Harmer Pens Winning Essay for ACSA International Cotton Institute

July 16, 2015

Stephen Harmer of Jess Smith & Sons won this year’s Meister Media Worldwide essay contest for students attending the ACSA International Cotton Institute in Memphis, TN.

International

ICA Bremen Opens New Cotton Testing Laboratory

June 25, 2015

ICA Bremen has opened a new cotton testing laboratory to help meet the growing demands of the global cotton and textile industry.

International

World Cotton Contract Back on Track?

June 17, 2015

IntercontinentalExchange’s new world cotton futures contract has seemingly cleared a significant legislative hurdle in the U.S.

Around The Gin
Product News

Falcon Adds Two New Automated Precision Soil Samplers

August 28, 2015

Falcon Soil Technology has added two new automated soil sampling systems to its product lineup.

Product News

HUMA GRO Adds New Boron Liquid Nutrient Formulation for Crops

August 28, 2015

BORO-MAX, a new boron 10 percent liquid nutrient formulation, is now available from HUMA GRO.

Product News

On-Farm Research Helps Ease Grower Questions About Enlist System

July 31, 2015

Southern cotton and soybean growers who have worked with the Enlist Weed Control System in on-farm research plots are now sharing their experiences.

Product News

Nufarm Introduces Panther SC Herbicide

July 24, 2015

Nufarm is introducing Panther SC herbicide, a new broad-spectrum herbicide for use in cotton and other Southern row crops.

Product News

USDA Deregulates Dow AgroSciences’ Enlist Cotton Trait

July 23, 2015

The USDA has deregulated Dow AgroSciences’ Enlist cotton trait in the United States.

Product News

Ratting Out Copper Theft

June 10, 2015

A simple alarm technology is helping to stop copper thieves who target irrigation systems.

Product News

EPA Approves New Premix for 2016 for Cotton, Soybean Weed Control

May 29, 2015

Cotton and soybean growers will have a new weed control option in 2016 with Warrant Ultra Herbicide, a premix of acetochlor and fomesafen.

Product News

Deltapine NPE Program Begins Eighth Year of On-Farm Variety Evaluation

April 28, 2015

Nearly 200 farmers will be part of the Deltapine New Product Evaluator program this year to help evaluate cotton variety candidates for the Deltapine Class of 16.

Latest News
International

China ELS Crop Could Triple

August 31, 2015

China’s production of extra-long staple cotton for 2015/16 could be three times the size of last year’s crop, thanks to new incentive programs tied to market prices.

International

First Estimate of New Season Indian Cotton Crop Released

August 25, 2015

The Indian cotton crop for the new season beginning this October is estimated to be 38 million bales (170 kilograms each).

International

Pakistan Taking the Fight to Cotton Leaf Curl Virus

August 19, 2015

Pakistani officials are working to ramp up efforts in the country’s on-going battle with cotton leaf curl virus.

International

Leading Global Economist Set for ICA Trade Event

August 14, 2015

Todd Buchholz, a leading expert on the U.S. and global economy, will share his thoughts on global politics and economics during the International Cotton Association’s (ICA) “San Francisco 2015” trade event in late October.

International

ICE World Contract Set to Begin in November

August 12, 2015

InterContinental Exchange's new world cotton futures contract will begin trading on November 2, pending regulatory approval.

International

Chinese Import Decline Hits the Indian Spinning Sector

August 10, 2015

Cotton spinning mills in India has been hard hit by declining yarn exports, leading some in northern India to consider shutting down one day a week.

International

Stephen Harmer Pens Winning Essay for ACSA International Cotton Institute

July 16, 2015

Stephen Harmer of Jess Smith & Sons won this year’s Meister Media Worldwide essay contest for students attending the ACSA International Cotton Institute in Memphis, TN.

International

ICA Bremen Opens New Cotton Testing Laboratory

June 25, 2015

ICA Bremen has opened a new cotton testing laboratory to help meet the growing demands of the global cotton and textile industry.

International

World Cotton Contract Back on Track?

June 17, 2015

IntercontinentalExchange’s new world cotton futures contract has seemingly cleared a significant legislative hurdle in the U.S.

International

Japan Cotton Traders’ Association Joins ICA

June 1, 2015

The Japan Cotton Traders’ Association has become a member of the International Cotton Association.

International

International Cotton Schools Ready for Summer Classes

May 5, 2015

This summer, students from around the world will learn about American cotton at the ACSA International Cotton Institute and the Texas International Cotton School.

International

ICA Wraps Up 2015 Complete Cotton Training Program

May 5, 2015

Thirty-seven delegates from throughout the global cotton industry recently completed the International Cotton Association’s annual Complete Cotton training program.

International

India Cotton Exports Down From Last Year

April 28, 2015

Current cotton exports from India are lagging compared to last year.

International

High Quality Draft Sequence of Upland Cotton Genome Released for Research

April 21, 2015

An international consortium has made a high-quality draft genome sequence of Upland cotton publicly available for cotton research.

International

ICA Trade Event Set for San Francisco in October

April 20, 2015

The International Cotton Association is bringing its major trade event to San Francisco, CA on October 30-31.