Because The Planting Area Is Reduced By &Nbsp; &Nbsp; The Quantity Of Cotton Purchase In China May Increase By &Nbsp; 30%

China is the world's largest cotton importer, and the number of cotton purchases this year could increase by 30%, pushing up global prices, because farmers' planting area will be reduced, according to researchers from a research institution in the country.

Mao Shuchun, a researcher at Chinese Academy of Agricultural Sciences, said in a telephone interview in Henan that the number of imports could exceed 2 million tons this year, up from 1 million 530 thousand tons last year.

Mao said that because of price fluctuations, domestic cotton farmers were harmed, and they replanted crops with better efficiency, including cereals and vegetables.

China's imports account for about 30% of the world's cotton trade, helping to raise cotton prices in New York. In the past year, the price of cotton in New York has doubled.

Mao said that the number of imports could increase this year.

The increase in procurement may push cotton prices in the US spot market to about 90 cents per pound.

This year China's cotton planting area may be 4.9% lower than that of last year's 74 million 250 thousand mu (5 million hectares), and this year it may be reduced to 70 million mu.

ICE cotton prices in the US cotton futures rose 0.3% to 81.37 cents / pound in May.

After rushing to a two-year high of 84.6 cents in March 1st, it has fallen by 3.8%.

Dong Shuzhi, an analyst with Henan Jinshi Futures Company, said that the supply of cotton in the inland provinces outside Xinjiang is very tight. He believes that in addition to the amount of 1 million 890 thousand tons, the government should extend 1 million tons of import quota.

China controls cotton imports by issuing licences to eligible users.

Mao said China plans to increase its stock of goods, which will also reduce commercial supply and force textile factories to seek imports.

The United States is the world's largest exporter of cotton, and the United States does not have enough supply because the United States policy is to promote ethanol based on corn.

In turn, this will force other cotton producing countries to grow more cereals than fiber crops.

The US Department of Agriculture reports that China expects to purchase 2 million 100 thousand tons of cotton this year, and the global export volume is expected to be 7 million 500 thousand tons.

The national development and Reform Commission (NDRC), the highest planning body, submitted a document to the National People's Congress on 5 March. It hopes that this year's cotton output will expand from 6 million 400 thousand tons in 2009 to 6 million 700 thousand tons.

Mao said that in 2004, the government formulated policies to support wheat, rice and corn, and since then all Chinese farmers have reduced their cotton planting area.

The policy tilts to cereal crops, and farmers get more guarantees from grain price fluctuations than cotton.

When the global economic crisis broke out in 2008, cotton prices plummeted and many farmers lost money.

Even if prices rebounded last year, the average rate of return for farmers was only 500 yuan ($73) per mu.

Growing fruits or vegetables is more than 10 times the income of cotton.

Mao said that fruit trees have been planted. If we want to expand the cotton planting area, we must cut down the fruit trees.