Domestic cotton market features a strained supply currently. Rising cotton import price adds to the cost of textile production. On the other hand, Xinjiang is plagued by a large cotton stock because of shipment cost. The Ministry of Finance has recently decided to give a subsidy of RMB400/MT to cotton shipped out of Xinjiang to eastern provinces from Year 2007 to 2010.

BOABC considers the policy conducive to China’s cotton production and macro-economic control.

Xinjiang is China’s biggest cotton producer, contributing to 40% of the nation’s total production. Planted cotton acreage and production hit record high levels of 1.783 million ha. and 2.9 million MT in 2007, exceeding the previous year by 7.1% and 8.4% respectively.

Because of grain and vegoil production, expansion of cotton acreage is unlikely in the reaches of the Yellow River and Yangtse River. The government’s policy to encourage cotton production in Xinjiang helps bring up domestic cotton self-supply and ensure the nation’s economic safety.

List

News Briefs 1

Subsidy to Xinjiang’s Cotton Outshipment Conducive to Cotton Market Development 2

Estimates of Cotton Consumption in Jan. ~ May 2

Cotton Imports in 2007/2008 4

Textile & Garment Exports in May 5

Investment in Textile Industry 7

Textile Industry Develops Faster Than Other Industries 8

Weather & Cotton Conditions 9

Price Trends: 11