Cotton Production Concerns Shifted To Quality Improvement During The "13Th Five-Year" Period

China is the largest in the world.

Consuming countries and importing countries.

During the "12th Five-Year" period, China's cotton industry has entered a period of adjustment. The scale of cotton production has steadily decreased, the production pattern has been adjusted in depth, and the consumption structure has been markedly upgraded.

Regulatory policies are more in line with industrial needs.

Looking forward to "13th Five-Year", the cotton production pattern will continue to adjust, and further concentrate on the cotton growing areas of Xinjiang. The cotton area of the Yangtze River and the Yellow River River Basin will continue to shrink, cotton consumption will steadily drop slightly, the scale of cotton imports will be reduced, and the trend of industrial pformation and upgrading will be obvious.

"12th Five-Year" period

Domestic and foreign cotton spreads narrowed

During the "12th Five-Year" period, China's cotton planting area and output fluctuated in a downward trend due to the continuous rise in labor costs and the relatively low efficiency of cotton planting.

In 2011~2015, the cotton planting area decreased from 75 million 570 thousand mu to 56 million 984 thousand mu, 24.6%, and the yield decreased from 6 million 589 thousand tons to 5 million 605 thousand tons, down 14.9%.

The cotton production pattern has been drastically adjusted, and the proportion of cotton production in Xinjiang has increased significantly. The cotton planting area in the the Yellow River River Basin and the Yangtze River Basin has shrunk.

At the same time, China's cotton consumption has been significantly reduced.

But because of the pformation and upgrading of the textile industry, the demand for high-quality cotton has increased.

In 2011~2012, the world's cotton prices surged and plummeted. In order to stabilize domestic cotton production and protect the interests of cotton farmers, China implemented cotton temporary purchase and storage policy in 2012~2014.

Cotton prices were relatively stable during the state's purchase and storage.

In 2014, according to the change of cotton market situation at home and abroad, China withdrew from the temporary cotton purchase and storage policy, and issued a pilot policy of cotton target price subsidy.

Under the condition of insufficient demand and abundant supply of cotton at home and abroad, domestic cotton prices have dropped sharply and continuously, and the domestic and foreign cotton price differentials have been greatly reduced.

Since 2015, the price of FCIndexM after tax is higher than domestic cotton price.

During the "12th Five-Year" period, cotton and cotton yarn imports increased significantly in China due to the large spread of cotton prices at home and abroad.

Cotton import decreased after cotton target price reform in 2014.

While importing cotton, cotton yarn imports also increased rapidly.

During the "12th Five-Year" period, a total of 8 million 884 thousand tons of cotton yarn was imported, an increase of 85.9% over that of 11th Five-Year.

Production continues to be concentrated in Xinjiang producing areas.

During the "13th Five-Year" period, cotton production scale was reduced as a result of rising cotton labor costs, large market fluctuations, comparative benefits, and tight water and land resources.

In the future, with the advance of the structural reform of cotton supply side, cotton production will be more developed to meet the needs of consumption, and attention should be shifted to the quality concerns of textile enterprises such as velvet, strength and so on.

Cotton consumption will steadily drop slightly.

China's cotton consumption will fluctuate downward in the future due to the steady rise in clothing consumption of domestic residents, the decline in the growth rate of clothing exports, and the enhancement of the substitution of chemical fibers for cotton.

Imports of cotton will decline, but cotton yarn imports will remain a certain size.

At present, China's cotton stocks reach more than 10 million tons. In the coming period, the government will gradually digest the inventory.

In order to digest inventory, we must tighten the cotton quasi tax quota, which will directly lead to a decline in China's cotton imports in the coming period.

However, the import volume of cotton yarn will still maintain a certain scale, and the substitution effect of imported cotton yarn on domestic cotton consumption is more obvious.

During the "13th Five-Year" period, China is mainly in the digestion of domestic inventory stage, which means that the price of domestic cotton market will be mainly affected by the state dumping policy and dumping price in the next few years, and there will be no significant fluctuations.