China cotton Conference on Jan 10 and 11 2008

According to Mr. Shi Jianwei, executive deputy president of the China Cotton Association (CCA), domestic cotton price unlikely rise significantly, which is to be addressed on the CCA/ADB/CNCE Beijing cotton conference on Jan 10 and 11, 2008.

As for domestic cotton output last year, different agencies offer different estimates. National Bureau of Statistics (NBS) issued that China's cotton output was 6.73 million tons; but National Development and Reform Commission (NDRC) concluded 7.74 million tons based on transportation of cotton from Xinjiang. However, the cotton area in 2007 was 82.5 million mu (1 hectare = 15 mu), up by 2.1 percent over the previous season, thus CCA believes that the final output should be 7.5 million tons according to its investigation.

According to Mr. Shi, from September to December 2007, China's estimated imports probably totalled around 700,000 tons. In past years, imports during these four months have usually represented one quarter of total imports. Based on this, total imports for 2007 cotton year will be about 2.8 million tons.

As for the price trend, he concluded there are several reasons influencing, including, insufficient domestic demand, strict monetary policy, lowering of export tariff rebate, appreciation of RMB, rise of labor cost.

On Jan 10 and 11, 2008, the CCA/ADB/CNCE Beijing cotton conference was held in Beijing. Wei Shiwu, vice president of Agricultural Development Bank (ADB) (which is one of the three policy banks in China) explained ADB's policy on cotton industry.

During the discussion, many textile enterprises complained and all said condition is severe in 2008. Several obstacles facing textile enterprises, especially the lowest level profit margin left for textile enterprises, under such condition, many textile enterprises cut their production or even closed. The common call from such enterprises are support from ADB and the central government.

After hearing such complaints from the cotton or textile enterprises, President Wei said that from last year ADB list cotton related activity as quasi-policy business, thus branch banks can be freed to make loan to cotton related enterprises who purchase cotton once they meet several restrictions. Previous this business is difficult to conduct because lower-level branch banks must take the risks. Policy change of ADB sounds good for cotton related enterprises.

The 2008's China Cotton Conference was held on January 10 and 11 in Beijing. Mr. Zhang Xianbin introduced the development of Revolution of Cotton Quality Classification during the meeting, who is the Deputy Director General of Department of Business and Economics introduced the development. He said, up to 2007 December 31, there are 1343 cotton processing enterprise have finished the technology reform, the number of rebuilt instruments is 1398, including 828 enterprise and 903 equipments have ability for processing big bale cotton (227kg), the total capacity reached 4500 thousand tons, this is 60% of the countrywide output. The country-wide 81 Notarial Survey Institute have found 84 Instrument Classification Laboratory, with 213 instruments which have big capacity and higher class speed, the total processing capacity reach 4300 thousand tons. As of January 6, over 1000 thousand tons have been classed by the new system.

Ms. Zhu Lanfen，vice president of China Cotton Association, report the present situation of mills in China in the 2008's China Cotton Academic Meeting. She points out those mills are coming up against the rigorous market pressure, since the macro-control and adjustment of China. During the first 11 months in 2007, the cumulative yarn production totaled 18050 thousand tons, 11.5% more than the same period in 2006. The export of cotton production in November reached $66.15 billion, 31.05% more than the same period in 2006. Including 16.67 billion dollar which is the export of textile production, increased 11.5%, and clothing export reached 49.48 billion dollar, increased 39.3%.