2004-2005 China Cotton Market Review & Outlook

http://www.chinaccm.com 2005-5-15 15:18

Published:            May 2005
Price (USD):         $1,500 /hard copy

Report Summary 

The cotton market in China was basically normal and steady in 2004.  Cotton production grew sharply, breaking the historical record.  Cotton consumption rose substantially, and export of cotton textile increased with steady steps.  Cotton enterprises saw improved efficiency and risk-resistance capability.  The State strengthened reform of the circulation system, the cotton market pattern took a shape relying on market adjustment and a multiple structure.  The cotton futures market was established, and the construction of the market system was optimized.  The trend of the cotton market in China in 2005 shall depend on the following factors: 

1.  Growth of export of cotton textile.  Starting from the beginning of 2005, those countries which have been imposing obstacles on import of Chinese textile will abolish quota limitations, and this shall bring an opportunity for the export.  Meanwhile, owing to the non market economic status of China in the beginning of WTO accession, European and American countries shall continue to use various kinds of reasons to adopt sanction measures on import of Chinese textile.  The growth of export of textile shall encounter a number of uncertain factors which shall affect the growth of cotton consumption to a certain extent. 

2.  Readjustment of the State's macro policies.  Whether the interest rate shall be raised, whether RMB shall appreciate and the implementation of the fiscal-monetary dual stable policy will affect the capital capability and decision on investment of cotton enterprises, and hence will affect the cotton industry.

3.  The State's rectification and reform over the cotton market, especially the combating against illegal procurement and the reform of quality test and quarantine shall affect regulated and systematic development of the cotton market. 

4.  Readjustment of policy on cotton import and export.  The import quota in 2005 shall be 894,000 tons.  Whether there shall be increased allocation of quota, how much and when will that be will affect the domestic price. 

This report has a detailed discussion on the above factors, and has a systematic analysis on the market trend, Government policy, production, sales, import and export of cotton and cotton textile in 2004.  Based on this, there is also a forecast for the market trend, production, sales, import and export of the cotton market in 2005.  This report is a reference for those who care about the Chinese cotton industry. 

Report Outline

Section 1    Macro Policies & Analysis of Cotton Industry

1.1    Government Guidance and Development of Cotton Industry
    1.1.1  Objectives and Modes of Development of Cotton Industry 
    1.1.2  Macro Control Policies of Cotton Industry
    1.1.3  Financial Policies of Cotton Industry
    1.1.4  Fiscal Policies of Cotton Industry
    1.1.5  Development of Cotton Production 
    1.1.6  Development of Cotton Textile Industry
    1.1.7  Impacts from Scale Control of Investment in Fixed Assets of Textile Industry to Cotton Industry, 2004
    1.1.8  Progress of Reform of Cotton Quality Testing System
    1.1.9  Policies on Quality Test & Quarantine of Cotton Import
1.2    Impacts on Development of Cotton Industry from WTO Accession
    1.2.1  Impacts from Entering the System of Rules of International Cotton Trade
    1.2.2  Impacts from Cotton Import
    1.2.3  Export of Cotton Textile & Trade Protectionism
1.3    Policies on Cotton Import, 2004
    1.3.1  Allocation of Cotton Import Quota & Administrative System, 2004
    1.3.2  VAT Policy on Cotton Import, 2004
    1.3.3  Policy on Import Duty of Cotton, 2004
1.4    Buildup of Cotton Market, 2004
    1.4.1  Rectification of Circulation Order of Cotton Spot Market 
    1.4.2  Impacts on Cotton Industry from Establishment of Cotton Futures Market
    1.4.3  Impacts on Spot Market Price from Establishment of Cotton Futures Market
1.5    Impacts on Cotton Industry from Adjustment of other Variables of National Economic System 
    1.5.1  Impacts on Cotton Market from Raising Basic Interests of Deposit and Loan
    1.5.2  Impacts on Development of Textile Industry from Price Hike of Electricity and Coal
    1.5.3  Impacts on Development of Cotton Industry from Changes of Grain Prices
    1.5.4  Impacts on Cotton and Cotton Textile Markets from Dual Stable Policies on Finance and Currency 
    1.5.5  Impacts on Development of Cotton Industry from Pressure of RMB Appreciation 

Section 2    Analysis of Cotton Market Operation, 2004

2.1    Review of Cotton Production
    2.1.1  Overview of Cotton Production
    2.1.2  Cotton Acreage, Yield & Output of Main Producing Regions
        2.1.2.1  Xinjiang Cotton Region
        2.1.2.2  Hebei-Shandong-Henan Cotton Region
        2.1.2.3  Cotton Region Along Yangtze Valley
2.2    Characteristics of Cotton Import
    2.2.1  Large Growth of Cotton Import
    2.2.2  Main Cotton Exporting Countries to China & Changes of Imported Volumes
        2.2.2.1  Growth of Cotton Import from US, Proportion in Total Fell
        2.2.2.2  Cotton from Uzbekistan & Australia Competed in Chinese Market
        2.2.2.3  Growing Momentum of Cotton Import from Africa 
2.3    Growth of Cotton Consumption
    2.3.1  Large Growth of Cotton Consumption
    2.3.2  Cotton Consumption of Main Cotton Yarn Producing Provinces, Jan-Dec 
        2.3.2.1  Changing Trend of Cotton Yarn Production & Cotton Consumption in Shandong
        2.3.2.2  Changing Trend of Cotton Yarn Production & Cotton Consumption in Jiangsu
        2.3.2.3  Changing Trend of Cotton Yarn Production & Cotton Consumption in Henan
        2.3.2.4  Changing Trend of Cotton Yarn Production & Cotton Consumption in Hubei
2.4    Characteristics of Cotton Export
    2.4.1  Further Decline of Cotton Export & Reasons 
    2.4.2  Cotton Exports to Different Countries 
2.5    Equilibrium of Cotton Supply & Demand, Jan-Dec 2004
    2.5.1  Equilibrium of Cotton Supply & Demand, Jan-Dec 2004
    2.5.2  Analysis of Stocks/Consumption, Jan-Dec 2004
2.6    Changing Trend of Cotton Spot Market Price
    2.6.1  Price Changes of Cotton and Reasons
    2.6.2  Changes of Cotton Prices at Various Places
        2.6.2.1  Xinjiang
        2.6.2.2  Shandong
        2.6.2.3  Hebei
        2.6.2.4  Henan
    2.6.3  Analysis of Cotton Production Cost of Main Producing Regions
        2.6.3.1  Xinjiang
        2.6.3.2  Shandong
        2.6.3.3  Hebei
        2.6.3.4  Henan
    2.6.4  Analysis of Cotton Comparative Benefit
        2.6.4.1  Decline of Cotton Production Benefit against Grain 
        2.6.4.2  Analysis of Factors behind Decline of Comparative Benefit
        2.6.4.3  Decline of Cotton Production Benefit Affects Stability & Development of Cotton Industry 
        2.6.4.4  Government Measures to Prevent Decline of Cotton Production Benefit & Actual Effects

Section 3    Prospect of Cotton Market, 2005

3.1    Forecast for Cotton Production
    3.1.1  Factors Affecting Cotton Acreage & Forecast for Acreage
    3.1.2  Forecast for Cotton Production & Supply in Main Producing Regions
    3.1.2.1  Xinjiang Cotton Region
    3.1.2.2  Hebei-Shandong-Henan Cotton Region
    3.1.2.3  Cotton Region Along Yangtze River 
3.2    Forecast for Cotton Import
    3.2.1  Cotton Import to Make up Shortage
    3.2.2  Cotton Import from US Still Play Leading Role
    3.2.3  Analysis of Factors Conducive to more Import
    3.2.4  Analysis of Factors Unfavorable to more Cotton Import
    3.2.5  Forecast for Gross Cotton Import
3.3    Forecast for Cotton Export
    3.3.1  Further Decline of Cotton Export
    3.3.2  Forecast for Cotton Export
3.4    Forecast for Yarn and Cotton Consumption
    3.4.1  New Sharp Growth of Cotton Consumption
    3.4.2  Forecast for Cotton Yarn Production & Cotton Consumption
        3.4.2.1  Forecast for Newly Increased Production Capacity of Cotton Yarn
        3.4.2.2  Analysis of Factors Restricting Cotton Yarn Production
        3.4.2.3  Forecast for Cotton Yarn Production
        3.4.2.4  Forecast for Cotton Consumption by Yarn Production
3.5    Equilibrium of Cotton Supply & Demand
    3.5.1  Equilibrium of Cotton Supply & Demand
    3.5.2  Analysis of Stocks/Consumption
3.6    Forecast for Trend of Cotton Spot Market Price
    3.6.1  Factors Affecting Changes of Cotton Price
    3.6.2  Forecast for Trend of Cotton Spot Market Price

Section 4    Prospect of Buildup of Cotton Futures Market and Development, 2005

4.1    Buildup & Development of Cotton Futures Market
    4.1.1  Buildup & Development of Cotton Futures Market
    4.1.2  Review of Cotton Futures Trade of CZCE, 2004
    4.1.3  Analysis of Impacts on Futures Market from Prohibiting Futures Trade of Enterprises which get Loans by Agricultural Development Bank
    4.1.4  Analysis of Changing Trend of CZCE Cotton Futures Price, 2004 & Affecting Factors
    4.1.5  Analysis of Impacts on Cotton Market from Cotton Futures & Countermeasures 
4.2    Prospect of Cotton Futures Market, 2005
    4.2.1  More Traders in Futures Market
    4.2.2  Further Expansion of Trading Scale at Futures Market
    4.2.3  More Linkage between Futures Market and Spot Market
    4.2.4  Impacts on Futures Market from Readjustments of Interest & Exchange Rate
    4.2.5  Forecast for Cotton Futures Price at CZCE, 2005

Section 5    Review & Outlook of Cotton Textile Industry, 2004 & 2005

5.1    Review of Cotton Textile Industry, 2004
    5.1.1  Production of Cotton Textile, 2004
    5.1.2  Characteristics of Export of Cotton Textile Garments, 2004 & Affecting Factors
    5.1.3  Impacts on Export of Cotton Textile from Implementation of New Anti-dumping Rules 
    5.1.4  Impacts on Cotton Consumption from Disputes over Cotton Textile Trade
    5.1.5  Analysis of Economic Efficiency of Cotton Textile Enterprises, 2004
    5.1.6  Price Trend of Cotton Textile, 2004
        5.1.6.1  Price Trend of Cotton Yarn
        5.1.6.2  Price Trend of other Cotton Textile
    5.1.7  Existing Problems and Countermeasures in Cotton Textile Industry
5.2    Prospect of Textile Industry, 2005
    5.2.1  Major Factors Affecting Development of Cotton Textile Industry, 2005
        5.2.1.1  Export Quota on Textile Garments to be Abolished on Time
        5.2.1.2  Foreign Countries to Abolish Import Quota on Textile
        5.2.1.3  Impacts on Textile Export from Levying More Export Duty
        5.2.1.4  Steady Growth of Cotton Textile Consumption
    5.2.2  Forecast for Cotton Textile Production 
    5.2.3  Forecast for Cotton Textile Export
    5.2.4  Forecast for Price Trend of Cotton Textile
    5.2.5  Analysis of Uncertain Factors in Development of Cotton Textile Industry, 2005

Section 6    Characteristics of New Cotton Procurement & Relevant Policies, 2004

6.1    Procurement of New Cotton
    6.1.1  Characteristics of Procurement Course of New Cotton & Reasons
    6.1.2  Analysis of Changes of Principal Buyers of New Cotton & Reasons 
    6.1.3  Price Index of New Cotton Procurement in the Nation & Producing Regions
    6.1.4  Price Trend of New Cotton Procurement & Reasons
    6.1.5  Procurement Prices from Perspective of Cotton Production Costs of Producing Regions 
    6.1.6  Procurement of New Cotton in Producing Regions
6.2    Relevant Polices for New Cotton Procurement
    6.2.1  Government Guiding Price on New Cotton Procurement in Producing Regions
    6.2.2  Agricultural Development Bank Requested Branches to Do Well in Fund Supply for Cotton Procurement and Management
    6.2.3  Impacts on New Cotton Procurement from Upper Limit of Loans from Agricultural Development Bank
    6.2.4  Agricultural Development Bank Accorded Equal Importance to Assisting New Cotton Procurement and Prevention of Financial Risks 
    6.2.5  Impacts on New Cotton Procurement from Readjusting Loan Objects by Agricultural Development Bank 
    6.2.6  Impacts on New Cotton Procurement from New Cotton Reserve Plan

Section 7    Impacts on International Market from Development of Cotton Industry in China

7.1    Status of Chinese Cotton Industry in the World
    7.1.1  Proportion of National Cotton Production in the World, 1959-2004
    7.1.2  Comparison of Cotton Yields with Foreign Countries, 1995-2004
    7.1.3  Steady Growth of Proportion of National Cotton Consumption in the World, 1997-2004
    7.1.4  Impacts on International Market from National Cotton Trade
    7.1.5  Gradual Linking up between National Cotton Price and International Price
    7.1.6  Analysis of Relations between Fluctuations of Cotton Price in China and International Price, 2004
7.2    Issues to Be Solved to Expand Influence of Chinese Cotton in International Market
    7.2.1  National Cotton Quality Standard Must Meet International Norms
    7.2.2  National Cotton Market System Should Be Optimized
    7.2.3  Cotton Enterprises Should Develop towards Scaled Operation
    7.2.4  Enhancing Macro Control Capability of Government over Cotton Market
    7.2.5  Perfection of Cotton-related Enterprises Credibility System
    7.2.6  Strengthening Financial Infrastructure Construction, Improving Risk Prevention Ability of Farmers
    7.2.7  Gradual Improvement of Comparative Benefit of Cotton Production

Section 8    Appendix