Texas Tech researchers gauge new Chinese cotton policy shift

April 27, 2011 By Norman Martin

China’s textile mill demand for cotton played a critical role in driving cotton prices to a record $2.27 last month, up 175 percent over the year before. But now cotton producers are wary of lower cotton prices in the near future, according to a report from Texas Tech University’s Cotton Economics Research Institute.

The reason: China recently announced a government purchasing price increase both to rebuild their strategic reserve of and increase domestic production. The Chinese government reportedly plans to buy cotton for a so-called “temporary” reserve from Sept. 1, 2011, to March 31, 2012, covering the fall harvest season.

In the new report, “Effects of an Increase in Chinese Government Purchasing Price on the World Cotton Market,” study authors noted that overall it’s projected that a higher government purchasing price in China would increase Chinese cotton imports, Chinese ending stocks and the world cotton price in the first year.

“Whether these effects are sustained over a longer period depends on how many years China will adopt the higher government purchasing price,” said Darren Hudson, Texas Tech’s Larry Combest Chair for Agricultural Competitiveness. “World mill use, however, is projected to decline as a result of a higher world cotton price.”

The impact of the one-year Chinese government purchasing price increase on U.S. farmers is only modest at best, Hudson said. Even if the government purchasing price is extended over a five year period, U.S. farm prices are only 1.2 percent higher on average.

Explore further: China's GM cotton farmers are losing money

Related Stories

ARS Survey Helps Growers Track Two Key Cotton Pests

December 1, 2009

(PhysOrg.com) -- Cotton growers will be better able to keep an eye out for two common pests because of a comprehensive survey by Agricultural Research Service (ARS) scientists at College Station, Texas.

New fibre testing device gives cotton an edge

March 9, 2010

(PhysOrg.com) -- A 'fibre maturity' testing device designed to improve the quality of fibre produced by Australian cotton growers and yarn quality in overseas spinning mills has been licensed to new-start Australian company, ...

Early cotton planting requires irrigation

September 9, 2010

Cotton growers can produce more cotton if they plant early, but not without irrigation. That's the finding of an article published in the September-October 2010 Agronomy Journal, a publication of the American Society of Agronomy.

Recommended for you

Biologists trace how human innovation impacts tool evolution

November 24, 2015

Many animals exhibit learned behaviors, but humans are unique in their capacity to build on existing knowledge to make new innovations. Understanding the patterns of how new generations of tools emerged in prehistoric societies, ...


Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.