June 15, 2012

China's 2012 cotton sowing land declines 9.6% on-year

The 2012 cotton planting area of China dropped 9.6% on-year as weak cotton prices and mounting labour and agricultural materials cost sharply cut sowing profit and affected the farmers, according to the China National Cotton Reserves Corporation (CNCRC).

The survey showed that the country sowed cotton on 4.79 million hectares of cropland this year, down 508,667 hectares or 9.6% from last year.

However, cotton acreage in Xinjiang Uygur Autonomous Region, the biggest cotton production base in China, saw a smaller decline of 1.1% as the region's promotion of machine picking played an active role in stabilising cotton planting area.

Since the state stockpiling program for cotton drew to a close at the end of March, the domestic cotton prices have maintained a soft trend. In May alone, the purchase price of unginned cotton dropped by 1% from RMB8.22/kg (US$1.29) to RMB8.14/kg (US$1.28), while the national cotton price index CCIndex 328, which indicates the average price of standard lint in China, dipped 0.6% from RMB19,523/tonne (US$3,064) to RMB19,407/tonne (US$3,045).

The CNCRC noted that cotton planting profit in Hebei and Anhui provinces, major cotton producing regions in China, slumped by more than 20% on-year in 2011.