Cotton Development Summit Forum: China'S Cotton Future Policy Orientation Will Be Based Mainly On Domestic Production.

Speaking of the future orientation of cotton policy, Zhang Xianbin said that three principles must be followed: first, China's cotton must be mainly based on domestic production, because we have strong domestic demand.

It was held in May 17th this year.

Zhang Xianbin, director of the Department of economic and trade of the national development and Reform Commission, has issued personal opinions on the sustainable development of China's cotton industry.

He said that the orientation of the future cotton policy will adhere to three principles: first, China's cotton must be mainly based on domestic production; imports can only be used as a supplement; second, maintaining the basic stability of cotton production and market prices is the necessary environment to promote the sustained and healthy development of the cotton industry; and third, China's textile exports must continue to increase the added value.

He believed that we should unswervingly follow the road of sustainable development of cotton industry in line with China's national conditions.

Cotton prices skyrocketed

Negative effects take a long time to digest.

In his speech, Zhang Xianbin first reviewed the sharp rise and fall of cotton prices.

Since the marketization of cotton market, there have been two major fluctuations in cotton prices in China. The first time was 2003, when cotton prices rose to 18000 yuan / ton at the time, and then fell to less than 12000 yuan / ton; the second time was 2010, and cotton prices rose to 31000 yuan / ton, and futures rose to 37000 yuan / ton, down to less than 19000 yuan / ton last year.

Every time the cotton price fluctuates sharply, the real economy of cotton processing enterprises and textile cotton enterprises is finally injured, some even close down.

For farmers who are planting cotton, they will also have adverse psychological effects. After the soaring cotton prices, farmers' enthusiasm and expectations for cotton planting have risen. The area will increase in the coming year and the output will go up, but the price of cotton will fall again, resulting in an increase in output and no increase in income.

The negative effects of every big fluctuation will take a long time to digest, including the rise in cotton prices in 2010. This kind of digestion continues to this day, and we are still paying for the last surge.

These lessons are very profound.

Temporary storage

It's a dilemma.

"Keep

The relative stability of prices is necessary for the healthy and sustainable development of China's cotton industry. It is also a consensus of the whole industry. The state is also exploring the macro control policy and striving to achieve this.

Zhang Xianbin said.

In 1999, the state liberalized the purchase and sale price of cotton. After several years of practice, the State Council decided in 2003 to set up the China cotton reserve management corporation, to restrain the fluctuation of market price, stabilize production and ensure the supply through the regulation of reserve.

The practice of reserve cotton proves that the reservoir can effectively alleviate cyclical problems caused by price fluctuation of supply and demand.

Before 2008, the State Reserve regulation was mainly in Xinjiang. At that time, because of the difficulty of selling cotton in Xinjiang, the state bought the 2.3 million tons to solve the problem.

But with the changing situation, the past experience of regulation and control has been constantly subverted. Especially when the cotton prices fell in 2008, the departments concerned had discussed how much they could solve the problem. Some people said that the maximum acquisition was 1 million tons, which resulted in the acquisition of 2 million 720 thousand tons in that year.

Even so, cotton prices at that time did not rise substantially, but picked up very slowly. This shows that the financial crisis has a serious impact on the market.

In 2008, the state received 2 million 720 thousand tons of storage, which in general played an important role in stabilizing cotton prices and protecting cotton farmers' interests.

In 2009, this part of the resources were put on the market, to a great extent, easing the contradiction caused by the sharp increase in demand.

However, this temporary measure, which is adopted because of the stage of supply and demand, is a way of adjusting afterwards, and has not fundamentally solved the contradiction in the production demand cycle.

In order to overcome the contradiction between big ups and downs in prices, we must further improve the operation mechanism of purchasing and storage control, so that a preventive measure can achieve the goal of stabilizing market expectations.

Therefore, with the approval of the State Council, from 2011 onwards, we will improve the regulation of purchasing and storage, normalize the measures of temporarily collecting and storing lint cotton in the main cotton producing areas, establish a temporary cotton storage and storage system, take into consideration various factors, and rationally formulate the temporary cotton storage and storage prices in the main cotton producing areas, and publish them before planting cotton seeds.

When the price of new cotton after listing is lower than the state's provisional storage and storage price, it will be opened and stored by the central storage cotton company. This arrangement mainly considers the announcement of the purchase and storage price before the sowing of cotton, so that cotton farmers and cotton enterprises can make their respective production plans ahead of schedule.

At present, the circulation of cotton is already a competitive market structure. By collecting and storing, the price of lint is stable, and the mechanism of linking up the price of lint storage and storage with the price of seed cotton storage and storage is conducive to stabilizing seed cotton prices, protecting the interests of cotton farmers, and also being operable.

Zhang Xianbin objectively evaluated the policy of temporary collection and storage. "It has kept the basic stability of domestic cotton prices, created a predictable market for production and business enterprises, protected the interests of cotton farmers, and effectively prevented large-scale landslides of cotton production in 2012.

At the same time, we should also see that any policy is not perfect. The implementation of the temporary purchase and storage policy is a must. From the perspective of stabilizing China's cotton production, the state's purchase and storage price should be higher, but it can not be too high from the angle of maintaining the competitiveness of textile exports.

This is a dilemma for the government. "

Cotton price gap at home and abroad

It will continue for a period of time.

If there is no big improvement in the international economic situation in the next two years, the global cotton will still produce more than the demand in the absence of extreme weather around the world.

In this regard, Zhang Xianbin analysis said that the main reason for the downward trend of international cotton prices, especially the recent sharp decline, is that in the context of the global cotton production increase, the international financial crisis intensified, resulting in further shrinkage of demand, amplifying the contradiction between supply exceeding demand.

It has been suggested that cotton imports should be liberalized, and imported cotton should be used to reduce costs and promote exports. In fact, from a economic point of view, price declines will not necessarily expand demand, but on the contrary, it will further curb demand and lead to vicious competition.

Demand is the fundamental problem facing the cotton industry at present.

Speaking of the future orientation of cotton policy, Zhang Xianbin said that three principles must be followed: first, China's cotton must be mainly based on domestic production, because we have strong domestic demand.

"If more than a billion people need cotton, if they rely too much on the international market, who can supply so much cotton? What will the price be? From the domestic demand, the annual clothing consumption demand expenditure of urban and rural residents has increased by 15% every year. Although the export of textile is not very good now, from the yarn production, the 1~4 growth rate basically maintained 15% this year.

China's cotton production must be based mainly on China, and imports can only be a supplement. "

Second, maintaining the basic stability of cotton production and market prices is the necessary environment to promote the sustained and healthy development of the cotton industry.

Third, China's textile exports should take a way to increase the added value.

Recently, the China Federation of textile industry has promulgated the outline of building a strong textile country. In the context of the rising labor costs and the weakening of comparative advantage of export products, it is said that it has become an inevitable trend to speed up the pformation from big textile country to strong textile country.

Whether the textile industry is active or passive, it has already been pformed in this direction.

In the context of the worsening international financial crisis and shrinking demand, China's cotton raw materials and labor costs have been significantly higher than those of India, Pakistan and other countries.

The competitive edge of rough machining is obviously weakened, but it still has strong competitiveness in clothing and other deep processing links.

At present, the difficulties we face are caused by the international environment.

In the face of this situation, the cotton industry chain is going to have to work together in the same boat. We need to focus on the long term, turn danger into opportunity, and work hard to speed up the pformation of development mode.