State of Chinese Cotton Production
August 24, 2009 According to the 2006 Agricultural Economic Census of the National Bureau of Statistics, China had 935 counties producing cotton distributed over 26 provinces, autonomous regions and municipalities directly under the Central Government.
There were 266 counties and cities with an annual output of over 5,000 tons, with 91.7% of the total output, distributed over Xinjiang, Hebei, Henan, Shandong, Shanxi, Shaanxi, Hubei, Hunan, Jiangsu, Anhui and Jiangxi. There were 166 counties and cities with an annual output of between 1,000 and 5,000 tons, with 6.7% of the total output. There were 503 counties and cities with an annual output of less than 1,000 tons, with 1.6% of the total output.
Due to climate change and the adjustment in the industrial structure of agriculture, a great change has taken place in the distribution of production and three major regions have been formed: Xinjiang and Gansu in the Northwest Provinces, the Yellow River Basin and the Yangtze River Delta.
Since August 2008, due to the impact of the international financial crisis, foreign demand has declined and cotton price has dropped. Imported cotton has dropped sharply and exports of textile products and apparels observed a negative growth.
With the new cotton year starting, cotton prices saw a sharp fall. The China Cotton Index of standard cotton on September 1, 2008, was 13,464 Yuan per ton and fell to its lowest point of 10,395 Yuan per ton on November 20, 2008 ― a drop of over 3,000 Yuan per ton.
Since late October, the State has procured cotton three times for reserve, totaling 2,720,000 tons, including 2,500,000 tons as a temporary reserve. That has played a decisive role in stabilizing the price of cotton. Cotton prices have continued to rise and returned to 12,766 Yuan per ton on May 12.
The trend of cotton price depends mainly on the impact of the international financial crisis on foreign demand and the controlling measures of the State. If the market price of cotton goes beyond the state reserve price, the reserved cotton will be released and the cotton price will remain stable. The market price after the reserve auction will cause a direct impact on the new crop price.
In 2009, the cotton planting area is reduced by about 13%, as forecast by both the Ministry of Agriculture and the China Cotton Association. But it is predicted that total output will still exceed 7,000,000 tons.
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Shi Jianwei
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