Cotton price has kept going south since mid 2008. The current seed cotton procurement price index is far below this year’s break-even point of RMB5,400/MT, resulting in a profit/cost ratio of ?13.9%, or a loss of RMB2,296/ha.

In view of the cotton price decline following cotton harvest, China Cotton Reserve Corp. procured 220,000 MT cotton in Xinjiang during Oct. 21 ~ 31, mostly at a price of RMB12,600/MT, in order to check cotton price decline. On Oct. 29, the government decided to procure additional 1 million MT cotton in the nation at a price of RMB12,600/MT.

If cotton price lingers low, cotton acreage is expected to shrink more than 10% next year, causing cotton production to decrease about 15% compared with this year. BOABC predicts that the government may practice unlimited cotton procurement to ensure a stable cotton production.

List

News Briefs 1

Low Cotton Price Likely to Affect Next Year’s Cotton Production 2

Hard Time for Textile Industry Despite Increase of Tax Refund Rate 4

China’s CPI & PPI in Sep. 5

Textile & Garment Consumption Increased Steadily in Jan. ~ Sep. 7

Investment in Textile Industry 8

Textile Industry’s Output Value in Sep. 10

Weather & Cotton Conditions (23, October -3, November) 11

Price Trends: 12