Cotton import cuts down farmers' income by 18b yuan
Source: CCPIT TEX Date: 2006-03-30
While most domestic textile companies struggle in a depressed industry, China had imported millions of cotton from other countries over the past four years. This not only makes domestic cotton price fluctuate, but also decreases farmers' income by 18 billion yuan. Some experts worry that China's large cotton import might destroy domestic cotton industry and deprive millions of farmers' opportunity to make a living.
Affected by various factors, production volume and price of cotton in China have fluctuated for many years. As cotton export increase substantially, China's cotton industry expanded rapidly and price for cotton also rise substantially. Statistics showed that since 1998, demand for domestic cotton increased by 10% every year on average, due to a great short supply of cotton.
During this time, large amount of imported cotton flow into China. Reports say that China has remained to be a cotton importer for years, with the import amount increasing year by year.
Should China depend on its own to produce cotton, or should China depend on import to meet the cotton shortage? China might have to pick up the choice now. If China tries to solve the problem solely by import, Chinese farmers will suffer and domestic textile companies will also be forced into a difficult situation.
In fact, large amount of cotton import has already influenced heavily the supply and demand order in domestic cotton market as well as the cotton price in China.
Most notably, among all the cotton imported from other country, cotton from the United States accounted for over half of it. Experts say that the competitive advantage of U.S. cotton arises from its government subsidy. U.S. government's subsidy to cotton keeps the cotton price remain low in international market, which not only adds pressure to Chinese cotton market, but also reduces farmers' income.
Facing with the growing cotton demand and large cotton import to China, experts point out that the problem could only be solved by increasing the proportion of domestic cotton production. If domestic cotton production can reach 80% of the total demand for cotton, China's supply and demand for cotton will maintain a balanced position, which will reduce China's over-reliance on cotton import.
