China Acreage Higher than Expected

By Jim.Robinson|May 20, 2009

Ghulam Rabbani & Co.

The China Cotton Association conducted a survey in late April that indicated that cotton planted area may decline by around 12.38% from the 2008/09 season, to 77.5 million mu.

In March, the Association forecast a steeper reduction of 14 percent. The survey results show that recent increases in price have influenced farmers to favor cotton. Also, spring weather for sowing cotton has been favorable overall and good progress has been made.

“Encouragement to plant alternative crops and the relatively high cost of cotton cultivation have influenced over half of the cotton growers interviewed to reduce area. However, 20 percent believe that government policies will play a positive role and foresee that demand will gradually pick up, so they have increased their plantings to cotton. About 26 percent have sown a similar area to last year.”

Xu Wenying, president of the China Cotton Textile Association, has called for the state reserves to be released to the market at lower prices in order to ease the pressures the industry is facing right now, according to a report from China Textile News. Xu has suggested setting selling prices at 11,000 to 11,600 Yuan per ton, levels that would be affordable to mills, despite the fact that reserves were procured at 12,600 Yuan per ton.