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Domestic Cotton Demand Surges

Zhao Huaxin

China is expected to cope with a rise in domestic demand for cotton this year despite a new surge in textile production, according to official sources.

Chinese farmers are growing more cotton than was planned to fulfill orders from textile producers demanding more raw materials to maintain their strong export growth.

Textile firms have seen exports rise by more than 40 percent in the first half of this year compared to the last year.

Officials said any shortfall would be dealt with by channeling part of the state's cotton reserve onto the market. This will help to avert any sudden surge in prices next year, Lei Xiangju, a division director of the All-China Federation of Supply and Marketing Co-operatives, said yesterday.

Fan Ning, an official with the State Textile Industry Bureau, also said he foresaw no major fluctuation in cotton prices in the coming months, but added prices would exceed last year's record 2,000 yuan (US$241) per ton mark this year.

Cotton is usually planted in March and April and harvested in September and October in China.

In the first half of this year, China's cotton imports shrunk by 43.9 percent to 25,400 tons, while exports rocketed by 121.9 percent to 212,200 tons.

This was as a result of the country's earlier decision to encourage its largest cotton producer--Xinjiang Uygur Autonomous Region--to export more cotton, according to statistics from Fan's agency.

The Ministry of Agriculture, in an effort to get farmers to grow different crops, had originally planned to cut the amount of cotton grown by 10 percent this year, with cotton output to be capped at 3.2 million tons--down 630,000 tons from 1999.

But Huang Bingxin, an official with the National Bureau of Statistics, said he estimated this year's cotton crop would roughly match last year's when the country planted 3.725 million hectares and produced 3.829 million tons of cotton.

Even excluding cotton planted this summer--the exact figure of which is not known--cotton sown this spring amounts to 3.524 million hectares, an increase of 1.7 percent from the corresponding period last year, Huang said.

Cotton growers increased enthusiasm for the crop was attributed to its relative profitability compared to grain and other products, said Ma Shuping, a division director of the ministry's Plantation Department.

For example, instead of cutting its cotton-growing acreage by 66,600 hectares as planned last year, Xinjiang devoted 1 million hectares to the crop this year, according to sources with the All-China Federation of Supply and Marketing Co-operatives.

The growing demand from the country's textile sector for cotton has reinforced farmers' confidence in the crop, hence they expanded growing acreage, according to Ma.

The first quarter this year saw China's cotton yarn production increase by 18.5 percent to 1.456 million tons. This steady growth has led the State Textile Industry Bureau to anticipate an additional demand of 320,000 tons of cotton for spinning mills this year, pushing the year's total projected cotton consumption up to 4.12 million tons, according to sources with the bureau's Industry Management Department.

As the world textile market sees an upturn, Lu Feng, a senior cotton expert with the China Economic Research Center at Beijing University, said the prospects for China's textile export trade looked rosy.

Between January and June, China exported US$23.83 billion worth of textile products, a jump of 41.8 percent from the corresponding period last year, statistics show.

Meanwhile, rising oil prices have made petrol-based synthetic fibers more expensive, prompting more Chinese textile producers to turn to cotton as their major raw material--another factor pushing up cotton prices, according to Lu.

Lei, of the All-China Federation of Supply and Marketing Co-operatives, said the State's aim was to set cotton prices to match world prices or slightly lower.

(China Daily)

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