China'S Loan Policy Initiative Aims To Encourage Spinning Mills To Import Cotton.

< p > China's efforts to reduce hasty bank loans represent China's latest policy initiatives, which have unforeseen effects on the a href= "http://www.91se91.com/news/index_c.asp" > cotton market < /a >, but once again encourage domestic textile mills to import cotton.

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The Central Bank of China, the people's Bank of China, said two weeks ago that it intends to tighten monetary policy aimed at achieving more stable economic growth. The aim is to curb banks' appetite for risky loans and to guide deposits into the balance sheet of "shadow banking" tools. P

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< p > however, the International Cotton Advisory Committee said that the move would have the most direct impact on China's cotton industry, which further reduced the textile industry's interest in domestic cotton and increased interest in foreign cotton. Even tariffs, foreign cotton was often cheaper and easier to buy foreign cotton.

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< p > < strong > "expand import" < /strong > /p >

< p > "the new policy has had an immediate impact on the spinning industry, and they have reduced the purchase of national cotton reserves because the reserve cotton requires payment after delivery", the intergovernmental organization's International Cotton Advisory Committee said.

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On the contrary, they expanded their letters of credit for 90 days, the committee said. China's policy is "the main driving force of world cotton prices", P ICAC said.

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P, the world's largest cotton exporter on Thursday, the US's weekly export sales may give further information about the trend.

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< p > the latest data show that in the week ending June 20th, before the announcement of the new measures by the Bank of China, in 2012 and 2013, < a href= "http://www.91se91.com/news/index_s.asp" > cotton < /a > added, the United States sold 50000 standard export packages and half sold to China.

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< p > < strong > > market distortion > /strong > /p >

< p > the current dynamic reflects the unforeseeable impact of the latest Chinese policy on the cotton market. The most important influence is the guaranteed price of cotton growers, far exceeding the international market level.

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< p > the result is a substantial increase in State Reserve inventories, sales of cotton farmers and rising prices in the domestic market. Besides tariff payment, textile mills are facing more import restrictions.

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< p > this, in turn, has reduced the competitiveness of the spinning mill and has handed over business to competitors, such as Vietnam, where the number of imported yarn from Chinese textile manufacturers has increased.

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< p > the International Cotton Advisory Committee stressed that Chinese policymakers are increasingly aware that the cotton support program has caused market distortion. They are trying to direct subsidy mechanism to support Xinjiang's a href= "http://www.91se91.com/news/index_q.asp" > cotton growers < /a >, after Hebei farmers get direct subsidies to reduce the planting area.

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< p > < strong > inventory prediction < /strong > < /p >

< p > ICAC predicts that although textile mills are interested in importing foreign cotton, China's State Reserve will be reduced to 8 million tons by the end of this month, equivalent to about 45% of world stock, and about 1 million tons less than that in June.

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< p > ICAC said: "when the cotton picking begins in September 2013-14, China's National Reserve will resume its purchase.

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< p > the International Cotton Advisory Committee predicts that in the 2013-14 year (beginning next month), world cotton stocks will be reduced by 130000 tons to 18 million 510 thousand tons.

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< p > inventory reduction is due to a decline in world production and a slight increase of 20000 tons in consumption.

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