Xinjiang Cotton Direct Subsidy Price Will Be Lowered

According to media reports, a person from the Xinjiang development and Reform Commission recently said that the average cost of planting cotton per mu in Xinjiang is about 2800 yuan. According to the target price of 19800 yuan per ton in the 2014/2015 cotton season, cotton growers earn less than 1000 yuan per ton. However, analysts believe that the Xinjiang cotton direct subsidy price reduction in 2015 will be a big probability event.

From September 2014 onwards, Xinjiang We should start the pilot reform of cotton target price and cancel the temporary storage and purchase of cotton. The cotton target price subsidy will be combined with the actual cotton planting area and seed cotton sale volume. The central subsidy fund will be subsidized by 60% of the planting area, and 40% will be subsidized according to the actual seed cotton sale volume.

Media also reported that the Xinjiang development and Reform Commission said that 2015/2016 cotton season, Xinjiang cotton Target prices may be introduced in April 2015.

In the eyes of analysts, Market cotton price In 2015, Xinjiang's cotton target price was hard to maintain in 2014. "In addition to being determined by the market price, otherwise, if we continue to insist on this price, it will undoubtedly increase the financial burden of the state. Target price reduction will be inevitable. Sun Liwu predicted that it would be below 19000 yuan / ton.

Feng Mengxiao, chief economist of China cotton storage information center, said that if the level of 19800 yuan / ton was re implemented in 2015, the possibility of downgrading could be seen from multiple angles, such as price differentials, financial burden and cost of agricultural materials.

The price of direct subsidy depends on the trend of domestic cotton prices in the future. Feng Mengxiao believes that in view of the external factors such as the US dollar exchange rate and international oil price, considering the fundamentals, cotton prices will tend to be stable due to domestic cotton production, supply and consumption.

Sun Liwu also predicted that 13000 yuan / ton should be the bottom of cotton prices, and cotton prices would still be "relatively bottomed up" around the Spring Festival. Sun Liwu finally suggested that cotton growers should strengthen field management and respond to price fluctuations with high quality and high yield cotton production.