State Reserve Cotton Sales Suspended for the New Year: Latest National Policy Arrives
The state will suspend the release of reserve cotton in the next cotton year to guide enterprises to actively purchase, process and sell new cotton. In 2015, cotton imports will be properly arranged according to the domestic supply and demand situation. In addition to the 894,000-ton tariff quota committed upon WTO accession, in principle no additional import quota will be issued, so as to guide domestic textile enterprises to use more domestic cotton.
This was the decision made on the 25th by eight departments including the National Development and Reform Commission. On the same day, eight departments including the NDRC and the Ministry of Finance jointly held a national cotton work teleconference to analyze the cotton production and sales situation for the new year and to deploy work related to cotton purchase and sale reform.
The meeting noted that in the just-concluded 2013 cotton year, the state effectively protected the interests of cotton farmers, ensured the demand for textile cotton and maintained the smooth operation of the cotton market through measures such as implementing the temporary purchase and storage policy, releasing reserve cotton at appropriate times and rationally arranging cotton imports. At the beginning of this year, the state launched a pilot reform of the target price for cotton in Xinjiang, China, while abolishing the temporary purchase and storage policy nationwide, so that the price of new cotton is mainly determined by the market, and gradually building a new cotton purchase and sale system that gives full play to the market mechanism and better leverages the role of the government.
The meeting predicted that domestic cotton demand will recover somewhat in the new year, and the domestic production-demand gap will tend to widen this year. Relevant departments and local governments must earnestly perform their duties, properly handle the relationship between new cotton sales, reserve releases and import arrangements, the relationship between protecting farmers' interests and improving textile competitiveness, and the relationship between market-determined prices and improved government regulation, guide market cotton prices to run within a reasonable range, and maintain the overall balance of domestic cotton supply and demand and basic market stability.