China Cotton Market Analysis and Outlook Zhaixueling June, 2013 Beijing
Introducing China cotton industry s position in the world cotton industry s. Analyzing China cotton industry status. Forecasting the outlook of China cotton industry.
一 China cotton industry occupies an important position in the world China is the world's biggest cotton producer, consumer and importer. China cotton market has great influence on the world cotton market.
China cotton production accounts for about 30% of the world s total; China cotton consumption accounts for about 38% of the world s total.
China is the world's biggest textiles and clothing exporter. China textiles and clothing exports accounts for about 30% of the world s total. China cotton market has great influence on the world cotton market
二 China cotton industry development status Demand Production Market Import Policy
1 China cotton demand has shown a trend of gradual increase 2002-2007, China cotton demand increased from 5.45 million tons to 10.29 million tons. Due to fluctuations in the world economy, China cotton consumption has fluctuated after 2008. China cotton consumption is expected at 8.2 million tons in 2012 annual.
Yarn production and textiles and clothing exports showed a growth trend. 2002-2012, China Yarn production grew by 2.8 times ; China textile and clothing exports grew by 3.1 times.
2 China cotton production increased volatility China cotton production was very volatility China cotton production is expected to reach 7.4 million tons in 2012 annual.
3 China cotton market is highly volatile,the gap between China cotton price and the world s is widing. China and World s Cotton Price Trend since 2007 Season
May 2013,for example The gap between CCindex and Cotlook A index is 6449 yuan a ton; The gap between CCindex and Fc index (1% duties)is 4178 yuan a ton; The gap between Ccindex and Fc index (silding duties) is 3471yuan a ton.
4 China cotton imports has continued to grow 2002-2012, China cotton imports increased from 0.245 million tons to 5.14 million tons which increased 20 times.
5 Policy China applied a quota system. China may impose 1% tariff on the quota cotton and 40% on the exceeding the quota. China applied the sliding duty system which rate is 5% --40% after 2005; Due to volatile cotton market,china began to apply reserve policy in 2008. In 2012,China standard grade cotton reserve price is 20,400 yuan a ton. China reserved 6.51 million tons cotton which accounts for about 85% of domestic production in 2012
China and World s Cotton Price Trend since 2007 Season Since 2008, despite the domestic cotton price fluctuations are more intense, but the China cotton price volatility is far less than the world s. Which is mainly due to China domestic cotton market policies
But the cotton market policies have also brought a heavy burden and pressure. Currently China cotton stock are 9.0 million tons, accounting for world cotton stocks about 54%.
三 China cotton market outlook
1 China cotton consumption will continue to grow in the future, but the growth rate will slow down. China has huge textile processing ability. China has world's first-class textile enterprises. China still has the advantage of labor. World cotton consumption will be driven by economic recovery China economy will continue to grow.
Current world economic recovery is slow. Textile production are shifting to South-east Asia. The future of China's textile and clothing export growth rate will significantly slow down. Since 2008, China's textile and clothing exports grew by only 8.3%, which is less than 2002-2008 s average annual growth rate of 20.1% China cotton yarn imports grew rapidly. China domestic economic growth is slowing down which will reduce domestic cotton consumption growth rate. 2013 January-April China GDP grew by 7.7%, below the level of previous years. Therefore, the future China cotton consumption will continue to grow, but the growth rate will decile.
2 China cotton acreage will slow in a Long term. (1)Cotton production cost especially labor cost rapidly is increasing. 2002-2011, production cost : Cotton increased 1.3 times, 1.2 times of rice s,0.7 times of wheat s and 1.2 times of corn s. Labor cost : Cotton increased 1.6 times, 1.1 times of rice s,1.2 times of wheat s and 1.2 times of corn s.
(2)Comparing with cereal crops, farmers who grow cotton bear more market risk. 图棉花 稻谷 小麦和玉米亩利润
3. China cotton imports will remain at a certain level in the future. Since consumption growing, declining in domestic production, China cotton import will remain at a certain level in the future. Meanwhile, China will increase imports more yarn.
4. Short-term China cotton prices will remain stable China continue to apply reserve policy in 2013, purchasing cotton price is 20,400 yuan a ton. Since a large number of China cotton stocks, China can sell cotton stocks according to market conditions in order to maintain cotton market stability.