By Jan. 9, procurement of cotton produced in 2008 totaled 1.709 million MT, short of the government’s plan of 2.72 million MT. Lint cotton and seed cotton procurement prices have been stable at RMB12,600/MT and RMB5,200/MT respectively.

Due to the scarcity of 400 Type cotton processing machines, most farmers are unable to sell cotton to mills with such machines and therefore are unable to benefit from the government’s favorable procurement policy.

Moreover, large vegoil companies take advantage of their monopolizing role in the market to force down cottonseed procurement price, giving rise to a low seed cotton price.

Taking into account of 30% increase of fertilizer cost, 15% increase of labor cost and 25% slip of the returns from cotton, cotton production generated a loss of RMB2,401/ha. in 2008, a heavy blow to farmers. Unless the government takes effective measures, planted cotton acreage is predicted to shrink more than 20% in regions other than Xinjiang in 2009.

List

News Briefs 1

Low Procurement Price Affects Cotton Production 2

Textile Industry’s Profit Margin & Investment 4

New Barriers to China’s Textile Exports 6

Weather & Cotton Conditions (31, December, 2008 -13, January, 2009) 7

Price Trends: 8