China Cotton Soars
2 May 2006 Chinese cotton is expected to be up by more than 6% over last year’s crop, and area up nearly 7%, to a total of almost 6.1 million metric tons (MMT) on 5.4 million hectares (Ha). High prices and farmer profitability are driving farmers to increase plantings, according to the US Department of Agriculture’s Foreign Agriculture Service (USDA/FAS).
According to the China Cotton Research Institute (CRI), the price for seed cotton and output value per unit in 2005 increased by 28.4% and 23%, respectively, over 2004. While increased production costs and decreased yields in some regions held production down, the nationwide average per unit returns for 2005 were up 33.8% over 2004. The highest growth recorded was in the Yellow River region, which was up 130.9%, followed by the Northwest region, which was up 32.9%. The lowest growth was in the Yangtze River region, which was up 3.2%.
Cause For Growth
The gains made in Chinese cotton were partly attributable to yield boosts from Bacillus thuringiensis (Bt) varieties. Farmers are expected to continue planting more area to Bt cotton in 2006. The area planted to Bt cotton in 2005 is estimated at 3 million Ha, and is forecast to reach 3.3 million Ha in 2006. According to CRI, the coverage of Bt cotton varieties is close to 100% in Shandong, Henan, Hebei, and Anhui provinces. Domestic Bt cotton varieties have taken about 70% of the market share. In Xinjiang, industry Bt cotton is not widely planted because bollworms are less of a problem there than in other areas, so farmers prefer cheaper conventional varieties.
Still, the combination of improved farming practices and the presence of pest pressures are likely to increase the use of inputs by farmers in 2006. China’s Ministry of Agriculture has predicted that cotton bollworm and aphids are likely to be worse than average in 2006.
China’s State Cotton Marketing Monitoring Network (SCMN) released its cotton planting intention survey in March, which showed the highest growth in planted area to be along the Yellow River, most notably in the Shandong and Henan provinces. Cotton area also is forecast to increase in the small producing provinces such as Shann’xi and Shanxi. Yields for the cotton crop are expected to be around 1.12 MT/Ha, which is the same figure as 2005, but higher than the historical average.
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