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Farmers Warned Not to Expand Cotton Production
Chinese farmers are being cautioned against expanding cotton production because initial projections have indicated current high prices will not last and supply may soon outstrip demand, officials and experts said Sunday.
The Ministry of Agriculture has decided to cap growth in the amount of land devoted to cotton at 333,300 hectares for 2001, which is expected to bring total acreage to 4.2 million hectares and total production to 4.25 million tons of cotton, a ministry spokesman said.
Cotton farmers, benefiting from price surges in 2000, are eager to dedicate more fields to the crop this year, but authorities fear the move may ultimately hurt the farmers' interests and derail the country's drive to optimize its agricultural structure, according to Cai Pai, an official with the ministry.
In Jiangsu Province alone, cotton-growing areas are projected to increase by 133,300 hectares to hit 433,300 hectares, sources with the provincial Agricultural and Forestry Department revealed.
Other provinces, such as Shandong, Hebei and Hunan, have all seen cotton growing areas rise by 20 per cent from last year's levels, Cai said.
According to statistics from the National Bureau of Statistics, Chinese farmers picked 4.35 million tons of cotton last year, when a boom in textile exports fed demand for cotton and drove up prices.
Commenting on the Ministry of Agriculture's new cotton quotas, Huang Binxing, an official with the bureau, said he thought the farmers were more likely to be seduced by the market than they were to obey the ministry's requirements.
Though the lure of high prices is understandable, farmers may not get what they expect out of increased production, warned Gong Wenlong, an official with the All-China Federation of Supply and Marketing Co-operatives.
The cotton yields from 2000, combined with the more than 900,000 tons of cotton reserves that were set to enter the market at the end of last year, are easily capable of satisfying the needs of the country's textile sector, whose exports have began to dwindle in the past several months, Gong explained.
These already existent cotton resources, along with the faltering performance of the textile industry and the possible market entry of an additional 400,000 tons of stock commodity cotton this year, mean market supply will probably exceed demand and prices will fall dramatically, he said.
"It is safe to conclude that China's cotton prices are going to fall before they rise again," Gong said.
Source: China Daily
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