Severe downturn of domestic cotton spinning industry

Dezhou City, Shandong Province is the focus of cotton-producing regions of the country, one of the city’s cotton production in 2008 ushered in yet another bumper harvest, the average per-mu yield of 186 kg lint, a record high, the city’s total output of 289 million mu of cotton reached 270,000 tons. But the harvest of cotton and cotton farmers did not bring the number of joy. Along the way trip costs,over the cotton price, so that farmers with knitted brows, into deep anxiety and despair. In 2008, after the listing of new cotton, farmers expect the situation in accordance with the previous year cotton seed cotton price at 3.2 yuan / kg more than the purchase price of cotton would like to surprise all the way down, from the beginning to 3.1 yuan / kg down to 2.3 yuan / kg or so, than last year the average price dropped by 1 yuan / kg or so. This is well below the psychological expected to cotton farmers.

Dezhou Cotton Association, according to a survey of local cotton production in 2008 increased the cost of larger, seeds, fertilizers, pesticides and artificial, such as the cost of need to down a total of 940 yuan (not including rent and fees), according to an average of 510 kg per mu , catty 2.30 yuan, the total income of 1173 yuan mu,230 million, if it is rented (around 300 yuan per mu) and hire Found cotton (around 150 yuan per mu), then a loss of .

Since the second half of 2007, the domestic cotton industry affected by the appreciation of the renminbi, labor costs and the international financial crisis, the serious downturn in the industry as a whole, reduced cotton lint prices in July 2008 from the maximum 14,100 yuan / ton to 10 months minimum 10,000 won / ton, 30 percent decline. Cotton processing enterprises as a result of downstream products (lint, edible oil, Cottonseed Meal) the impact of continuing price cuts, the acquisition increases the risk, when margins are thin majority since early September and they dare not cotton enterprises have acquired are also very cautious. There will be no more timely acquisition and selling, general loss, to close much more than lose. As of the end of December 2008, Dezhou acquired about 50 percent in volume, while the acquisition by the end of December in previous years, typically in more than 70%. At present, a large number of cotton farmers has also piled up in the home, easy to damp mildew, or mixed with the opposite sex fiber, will directly affect the cotton quality, to sell no more good price. Cotton marketing difficulties, not only a substantial reduction in cotton farmers, but also a direct impact on cotton farmers in 2009 planted the enthusiasm. According to the survey, in 2009 Dezhou cotton acreage will be reduced by more than 20%.

For cotton price fell, cotton farmers to reduce the situation of cotton farmers in order to protect the interests of relevant state departments quickly issued a series of stable prices, support policies and measures in cotton production, such as improved varieties to increase the scope of subsidies to cotton production counties and areas to increase the purchase of agricultural subsidies, and strengthen management of imported cotton. At the same time, countries from the beginning of the end of September 2008 before and after the three announced the acquisition of 2.72 million tons of cotton plans, three batches of the total land reserves of the country in 2008 accounted for cotton production more than 35 percent. National introduction of the policy is a good starting point, in order to protect the interests of farmers, but in the actual implementation of some policies it is difficult to operate. Such as: December 22 by the State Reserve announced plans to 1.5 million tons and 400 tons of demands large enterprises minimum package by 2.60 yuan / kg to buy seed cotton, this policy is neither good operation, not nearly reasonable.

Poor operation means: At present, farmers sell directly to the cotton plant’s small, mostly sell to cotton traders, cotton traders from selling cotton plant. Cotton traders are 1-2 million cars a catty, and the Inland Revenue Department to provide the greatest amount of each invoice can only be open until 4999 yuan, and asked to write the names of farmers, so that cars of cotton will be open nearly 10 invoices, inconvenient . Bid 100 tons of lint cotton, at least to provide the acquisition of 260 invoices, which both increased the cost of cotton enterprises, but also increased the workload of enterprise, this policy is not realistic.

Not nearly reasonable means: seed cotton price is the price and cottonseed from lint prices to decide the state can pricing lint prices, but prices of the country regardless of cottonseed is always changing. This year, the cottonseed price from 1.05 yuan / kg early in December fell to the lowest 0.63 yuan / kg. At present, prices of cottonseed 0.68 yuan / kg, 40% of lint percentage price 2.60 yuan / kg or so, if the price rose to 1.00 cottonseed / kg, in the lint prices remain unchanged, 40% of purchase price of cotton lint percentage of seed cotton prices would be a to 2.80 yuan / kg. At the same time, seed cotton prices have a relationship with lint percentage, different regions and different varieties of seed cotton lint percentage, the same car seed cotton, lint percentage difference between the 1, seed cotton price difference of 0.05 yuan catty, that is 38% and 40% of clothing lint percentage hours of seed cotton price difference between 0.10 yuan / kg. 400 tons of cotton-type businesses bidding on the State Reserve after cotton prices by 12,600 yuan / ton profitable sales, but if the bid is not only according to market 11,000 yuan / ton sales, profit or a loss of it. Therefore, countries that require cotton prices by not less than 2.6 yuan / kg to buy seed cotton is unreasonable, and it is very difficult to operate.

Cotton area in order to stabilize and protect the interests of cotton growers, the industry proposal: First, as the cultivation of grain, the state subsidies; II is based on agricultural prices was the situation and implement integrated agricultural subsidies, to make up for agricultural prices brought about by reduction; The third is to expand the scope of cotton seed subsidies, expand the coverage; four cotton insurance in pilot basis, to further expand the scope of; The fifth is to increase the number of Mainland cotton.