China’s cotton yield continued to decline in 2015 as the growing area decreased, official data showed. Cotton yield in the world’s second largest economy decreased 574,000 tonnes, or 9.3 percent, year on year to 5.6 million tonnes, according to the National Bureau of Statistics (NBS). Last year, the cotton growing area went down 423,400 hectares, or 10 percent, to 3.799 million hectares, in China, said Hou Rui, senior statistician of the NBS…Full Article: Xinhua Feb 2016

Key Point

  • From 2014 to 2015, Xinjiang’s share of China’s total cotton production increased from 59.5% to 62.5% (~3.5 million MTs).

ChinaAg Comments

  • In October 2015, China delegated its quota review and approval process for cotton processing to provincial authorities in order to streamline the country’s cotton processing industry and avoid excessive investment/overcapacity.
  • In September 2015, the President of the China National Textile & Apparel Council (CNTAC) stated China needs 3.5 million MTs of “high quality” cotton.
  • From July to August 2015, according to the NDRC, China attempted to auction 330,000 MTs of 2011’s cotton crop at CNY 13,200 (~US$2,125) per MT, 470,000 MTs of 2012’s crop at CNY 14,200 (~US$2,286) per MT, and 200,000 MTs of 2012’s imports (not domestic) at CNY 15,500 (~US$2,495) per MT.
  • In June 2015, China’s NDRC announced plans to sell off the country’s cotton stockpile (~10 million MTs as of mid-2105). According to an NDRC official, it will take China several years to sell and consume its current cotton stockpile.
  • In 2014, Chinese cotton reserves reached 11 million MTs, equal to roughly half of global cotton trade volumes. Additionally, Xinjiang Region accounted for 60% or 3.6 million MTs of China’s total cotton output.
  • In September 2014, China announced that would not increase its cotton import quota beyond 894,000 MTs for 2015. At the same time, the Chinese domestic price for ginned cotton totaled CNY 14,000 (~US$ 2,284.50) per metric ton. At the same, in the US futures markets, the price of ginned cotton stands at approximately CNY 11,800 (~US$1,925.50) per MT.
  • In April 2014, China’s NDRC announced it would abolish the minimum purchase price for cotton and instead would set CNY 19,800 (~US$3,224) per MT as the reference price. If the free market price falls below the reference price, then farmers will receive a subsidy based on the quantity of cotton sold in February 2015.
  • From 2012 to 2013, China’s cotton output declined from 6.8 million MTs to 6.2 million MTs. In 2013, Xinjiang accounted 56% or 3.5 million MTs of Chinese cotton production. The next largest producer was Shandong which accounted for 10% (620,961 MTs of output).
  • In mid-2011, developed market economies (e.g. countries) began curtailing their imports of Chinese-made clothing and yarn products.

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