Xinjiang cotton 2015 target price set at 19,100 yuan per ton

The 2015 Xinjiang cotton target price level is 19,100 yuan per ton, 700 yuan per ton lower than last year's price.

On the evening of April 7, according to a message on the website of the National Development and Reform Commission, in 2015 the state will continue to carry out the pilot reform of the cotton target price in Xinjiang.

Taking comprehensive account of factors such as cotton production costs and returns and market supply and demand, and with the approval of the State Council, the National Development and Reform Commission announced that the 2015 Xinjiang cotton target price level is 19,100 yuan per ton.

Xinjiang's cotton-growing areas include more than 60 counties and cities in northern and southern Xinjiang and more than 110 regiment farms of the Corps. Of Xinjiang's more than 2.3 million farming households, 50% grow cotton, and cotton is generally planted in April.

On April 8, Wang Xinjiang, a researcher at the National Cotton Engineering Technology Research Center, said that because most domestic cotton-producing areas have experienced cooling weather since Qingming this year, the concentrated sowing period for cotton has been delayed to varying degrees, and is expected to be in mid- or late April; the target price was released before the start of spring sowing, sending a reference signal for cotton farmers' sowing.

Last year, the state determined for the first time to carry out the pilot reform of the cotton target price in Xinjiang, and that year Xinjiang also published a specific implementation plan. This marked the official end of the cotton temporary purchase and storage system that had lasted for many years, and the state's subsidy for cotton changed from an "implicit subsidy" to an "explicit subsidy."

In fact, before this year's cotton target price was issued, Xinjiang cotton farmers' willingness to grow cotton had declined. The reporter learned from the autonomous region's Department of Agriculture that this year Xinjiang plans to reduce the cotton planting area by 4.665 million mu.

In 2014, Xinjiang's cotton output reached 3.677 million tons, accounting for 59.7% of the national total. A cotton analyst predicted that Xinjiang's reduction of 4.665 million mu of risky cotton fields means that the new cotton supply from 2015 to 2016 will decline accordingly, and in the long run this will help improve the supply and demand pattern of the domestic cotton market and keep cotton prices running steadily.

Wang Xinjiang said that the implementation of the cotton target price subsidy policy has also brought Xinjiang cotton prices in line with international cotton prices, making Xinjiang cotton prices more competitive and reducing textile enterprises' raw material costs.

The reporter learned from the autonomous region's Textile Industry Office that in 2013, more than half of Xinjiang's textile enterprises above designated size suffered losses, and the fundamental cause of the losses was the price of cotton raw materials at home and abroad. Last year, driven by various policies such as the direct cotton subsidy policy and Xinjiang's development of the textile and garment industry to boost employment, Xinjiang's textile industry turned losses into profits.

Zhang Hongzhou, director of the textile division of China Galaxy Futures, also said in an interview that the target price of 19,100 yuan is a good thing for cotton processing plants and textile mills from the perspective of resources, because the market's inherent planting intention will not decrease.

Industry insiders also frankly said that the cotton target price being 700 yuan lower per ton of lint cotton compared with 2014 is equivalent to a drop of about 0.2 yuan per kg, meaning that the floor price for cotton farmers growing cotton has changed little.