February 24, 2012

China's 2012 cotton acreage slides 6.1% on-year

China's 2012 cotton sowing area may fall 6.1% on-year to 5.09 million ha amidst a drop in farmers' interest in planting cotton, the Cotton Research Institute under the Chinese Academy of Agricultural Sciences reported on Thursday (Feb 23).

The report, published on the website of the China Cotton Association, shows the results of the institute's survey on farmers' interest in planting cotton in the country's major producing areas.

A sharp fall in the price of unginned cotton last year was a major reason for the decrease of planting intention, the report pointed out. But the state stockpiling program effectively curbed a further fall of cotton prices and would thus avoid a significant fall in this year's cotton acreage, according to the report.

Average prices of unginned cotton stood at RMB7.67/kg (US$1.22) in crop year 2011-12, a slump of 29.9% from the previous crop year, while cotton planting costs in 2011 surged 21% over the preceding year. Unit profit from cotton planting last year tumbled 59% on an on-year basis.

The report also suggested the government raise the minimum purchase price for cotton by 5% to RMB20,790/tonne (US$3,301) in crop year 2012-13.