Supply deficit gnaws at nation's cotton sector

By Feiwen Rong (China Daily)
Updated: 2010-09-28 11:53
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Beijing - Demand for cotton in China, the world's largest buyer and grower, outstripped domestic production by 3.6 million tons in 2009-2010, widening a supply deficit, the China Cotton Association said on Monday.

The gap increased by 2.6 million tons from the previous year, the group said, citing Zhang Xiaoqiang, deputy head of the National Development and Reform Commission.

"A recovery in the textile industry coupled with a drop in production because of lower income from cotton planting has resulted in a relatively big change in the demand and supply balance," the association said, citing Zhang in a government meeting on cotton.

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China's domestic cotton production fell by 14.7 percent to 6.4 million tons in the year ended Aug 31, Zhang was quoted as saying. Yarn production expanded by 16.6 percent in the same period to 26.41 million tons, driving a total demand for cotton to 10.6 million tons, he added.

China has sold the natural fiber from government stockpiles in auctions to bridge the supply gap, offloading 1.1 million tons during September and December and another 230,000 tons between Aug 10 and 31, Zhang said. The country's cotton imports jumped 73 percent from a year ago to 2.51 million tons.

Standard cotton prices in China have climbed 29.3 percent in 2009-2010 to an average 15,724 yuan ($2,347) a ton.

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