资讯 1 10 英文网 294 lunbotu 552259 China high-quality cotton to surge in 2015-16 2015-09-01 15:04:34 yangfang
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China high-quality cotton to surge in 2015-16
2015-09-01

BEIJING - China's production of top quality cotton, known as extra-long staple (ELS) cotton, could be three times last year's crop in 2015/16, traders estimate, pressuring prices and demand from global exporters like the United States.

ELS cotton, also known as pima, makes up a tiny portion of total cotton consumption. It is mainly used by luxury shirt brands and in high-end bed sheets.

Chinese mills consume most of the fibre but local output declined under a government stockpiling policy that paid generous prices to farmers for regular cotton, and offered no incentive to growers of higher quality ELS.

After China abandoned stockpiling last year and offered new subsidies connected to market prices, farmers began to plant significantly more ELS. Beijing's subsidy for the fibre is 1.3 times the regular cotton subsidy.

ELS acreage hit 1.9 million mu, equivalent to 127,000 hectares, trade website Cncotton.com reported on Friday, citing a Xinjiang agriculture official, up from less than 1 million mu last year.

"It may be as high as 2.2 to 2.3 million mu," said a cotton dealer who recently visited growers in Aksu in northwestern Xinjiang, who produce most of China's ELS cotton.

Output could be as much as 180,000 tons, triple last year's level of 60,000 tons, traders said, adding that there were no official estimates and it was still too early to accurately predict yields.

"I think 130,000-150,000 tons is very reasonable," said one Chinese trader, adding that pressure on prices will be "huge".

The ELS premium over regular cotton has risen significantly in recent years, after drought and competing crops inCalifornia reduced production in the world's top exporter.

U.S. pima is currently quoted at about $1.60 per pound, more than double the price of regular cotton.

U.S. output is estimated at 432,000 bales or 94,118 tons, 24 percent lower than last year, says the U.S Department of Agriculture.

A smaller U.S. crop will do little to support prices, given China's surge in output however.

There are currently no enquiries for U.S. imports, say traders, pointing to expectations of lower Chinese prices.

China will buy some U.S. pima for certain types of yarn, said an executive at one of the country's major mills who declined to be identified.

"There will be a market for it but at the right price. You can't hold on to prices of $1.65."

He added that Xinjiang could increase its output of ginned ELS by an additional 30,000 tons in coming years.