Beijing, CNCotton: Ma Zhanping, Deputy Director-General of Economic and Trade Department of NDRC made impressive remarks at the third council of China Cotton Textile Association (CCTA).
Review of the tenth five-year plan
China cotton supply deficit expanded and production sees a recovery from the previous downturn. Averaged plantation is 1,218,000 acres and the five-year average output records 5.43 mil tons. Yield average is registered at 72.5 kilo per mu. Cotton production reached a high of 6.32 mil tons in 2004 under a total area of 1,405,000 acres. Annual output growth is 1.15 mil tons higher than the level recorded in the ninth five-year plan and yield was up 5.8 kilo per mu. However, despite a steady increase in cotton areas, average plantation was 1.64 mil acres less compared with 9th five-year plan record.
The production capacity of textile industry experienced fast expansion. Ever-increasing supply deficit has resulted in a steady increase of cotton import. Meanwhile, domestic cotton price underwent a violent fluctuation. Seed cotton procurement price ranged between 360 to 750 during this period. Physical price once topped 17000 yuan per ton in a hectic emotion and dipped to 11300 in early 2005 and managed to gain 2800 to as high as 14100 yuan per ton by the end of last year.
As for domestic cotton price, Ma said that while the prevailing price is weakening, the longer-term market may not see substantial declines further. Heavy arrivals of imported cotton contributed to a decaying domestic cotton price. However, physical price will received good support from a long term supply-demand gap. Furthermore, this supportive factor still faces a balanced world supply and demand outlook and domestic price will be staying at approximately 14000 yuan per ton.
Projections for the 11th five-year plan
China cotton plantation will only see a moderate increase in the next five years. By 2010, cotton acres could rise to 14 mil acres. Among this, around one mil are expected from the North China Plain. Xinjiang has a potential to increase 330,000-500,000 acres and the East China Plain also has a chance to expand 165,000-330,000 acres. Chinas cotton yield surged 5 kilo in the five years between 1997 and 2002. For the coming 5 years, cotton yield will achieve further gains with the introduction of improved seed quality and planting techniques. Such changes will allow cotton yield to reach 6.5 mil tons in the new planting season.
