China Announced That It Would Rebuild Cotton Reserves This Year To Prevent "Cotton Cheap Injury To Farmers".

2011/4/5 10:10:00 61

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When cotton farmers worry that cotton prices may fall from a record high, China announced plans to rebuild cotton (28170, -285.00, -1.00%) reserves this year to encourage domestic cotton production.

China is the largest cotton producer in the world, but the strong domestic textile industry has also made China the biggest.

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Consuming countries and importing countries.

Demand for China's textile mills is the main driving force for New York cotton prices to rise this month - cotton prices in New York rose to a record $2.27 a pound this month, up 175% from last year.

China's national development and Reform Commission said it would buy cotton as a "temporary" reserve from September 1, 2011 to March 31, 2012 (that is, the new cotton sale period of 2011), and the minimum storage price will be 19 thousand and 800 yuan per ton.

This is equivalent to about 1.40 US dollars per pound, slightly higher than the benchmark cotton price delivered in December in New York.

The announcement of the temporary purchase and storage decision coincided with the planting of farmers in various parts of China.

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Or decide whether to plant cotton or replace other crops.

China Cotton Association estimates that the total cotton planting area will reach 5 million 640 thousand hectares this year, an increase of 9.8% over the same period last year.

Ma Wenfeng, an analyst at Beijing orient Agricultural Consulting Co. Ltd., said: "the government now announces the establishment of a temporary reserve.

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It is a very positive signal to farmers about the future cotton price. "

He went on to say that after the fall of global cotton prices in 2008, Chinese cotton growers have doubts about whether high cotton prices will continue.

"Cotton farmers are worried now that cotton prices will not be as high as they hoped this year."