August 2, 2012

China's 2012 cotton yield seen to surpass goal

China's cotton crop is likely to beat the government's 2012 goal of 6.99 million tonnes, the China Cotton Association stated on Monday (July 30), which is already higher by almost 6% from last year.

The higher-than-expected production, up from 6.6 million tonnes in 2011, could weigh on domestic prices and dent China's appetite for imports should overseas prices become uncompetitive.

Although planting acreage for cotton shrank by 8.8% from a year ago to 7,315 mu (487.6 hectares), better soil and weather conditions and reduced crop disease are expected to boost overall production, the association said in a statement.

Cotton prices on the Dalian Commodity Exchange have fallen 9% so far this year to RMB18,865 (US$3,000) as demand from textile mills has withered on the back of slumping demand for exports. A further fall in prices would narrow the advantage of imports.

China's cotton imports grew 18.6% in 2011 to 3.36 million tonnes, largely from India and the US.