China : Cotton acreage to decline due to profit slump

Farmers in Hebei Cangzhou complained recently that they would not grow cotton next year due to the slump of cotton earnings. Hence, experts believe that the decline of cotton acreage next year will likely bring a second rally for domestic cotton price.

At present, the prices of local wheat and maize have reached more than 1.6 yuan per kg, with profits of about 1,000 yuan per mu (one hectare =15 mu) and also enjoying state subsidies.

By contrast, cotton income this year is around 600 yuan per mu, besides, cotton growing is a labor-intensive and time-consuming job. Many farmers in Cangzhou have shifted previous cotton land into wheat fields.

Currently, the price of local growth of unginned cotton grade 3 is at 5.4 yuan per kg, the cost of processing unginned cotton into lint is at 12400 yuan per ton. However, it seems no sign of spot sales, delivery quotation of lint grade 3 is at different levels against cotton quality, ranging from 12100-12600 yuan per ton.

Although it is a fairly difficult time, some local cotton enterprises state that the decline of cotton area does not only represent the plight in Cangzhou, the drop of national cotton planting acreage in March and April next year will, to a large extent, promote a rebound in spot cotton market.

 
 
Fibre2fashion, News Desk - China