China Expecting Drop In Price Of Cotton As Fixed Prices Disappear

BEIJING, August 2 (Xinhua) -- China's State Development Planning Commission, the price regulatory commission, said recently that the government will no longer set the purchase price of cotton and that this may lead to a drop in the price.

Industry analysts predict that the price will fall by a big margin as cotton surpluses grow and the price becomes tied to the market.

China expects another good cotton harvest this year, which will depress cotton sales because of stockpiles. And global cotton production is expected to increase by about five percent on an annual basis, but cotton consumption will grow only about 1.2 percent.

The falling prices will affect low-quality cotton directly and may cause cotton planters to improve the quality of their cotton, Commission officials say.