China increases cotton purchase price
China has lifted the purchase price of cotton in what has been reported as an attempt to support domestic production of the fibre. The National Development and Reform Commission said that China will buy 2012-13 cotton for state reserves at $3,240 a tonne, a rise of $95.23, or 3%, from the previous year.
The price is the equivalent of more than 145 cents a pound, more than US growers receive. New York cotton futures currently stand at around 91.48 cents a pound, as measured by the December 2012 contract.
Chinese farmers’ profits for 2011-12 have more than halved, to $1,134 per hectare, due to lower prices and a 21% jump in costs.
A number of surveys have revealed the possibility of lower cotton sowings for the country in 2012, with the Cotton Research Institute at the China Academy of Agriculture science recently forecasting a 6.1% drop following a farm survey. The National Cotton Market Monitoring Network has forecast an 8.2% drop and the China Cotton Association a 10.5% decline.
