Cotton market: industrial development becomes more market-oriented

Under the new situation, especially since the launch of the target price reform pilot, Xinjiang's cotton industry has undergone significant changes.

First, the situation of cotton production expansion and development has changed. In 2015, Xinjiang reduced the cotton area by 6.1 million acres. In 2016, Xinjiang local plans further reduced the cotton area by 1.5 million acres. It is estimated that the cotton area in 2016 will be more than 30 million acres, and cotton production will be concentrated in advantageous cotton areas.

Second, cotton prices began to be mainly determined by the market. The target price pilot reform has given full play to the role of the market in allocating resources and determining prices. In 2015, the purchase price of seed cotton basically remained at around 5.7 yuan/kg, which changed the phenomenon of large fluctuations in cotton market prices between years in the past.

Third, the comparative efficiency of cotton planting continues to decrease. The problem of high cotton production costs in Xinjiang, especially high labor costs, is difficult to solve in the short term. Without target price subsidy income, cotton farmers' production will be unsustainable.

Fourth, cotton quality issues have received attention. Since the pilot cotton target price reform, as the market mechanism gradually comes into play, cotton production, processing and other links have increasingly paid attention to cotton quality, improved processing technology according to the requirements of textile enterprises, and changed the past mixed grades and pursuit of high quality when purchasing seed cotton. In order to solve the phenomenon of cotton grading, grading and grading were implemented, and pricing based on indicators such as clothing point, lint length, and strength was implemented. The quality level of Xinjiang cotton began to improve restoratively.

Fifth, relevant parties in the cotton industry chain actively interact. The prices of seed cotton, lint cotton and cotton yarn have begun to be effectively linked and linked. The market determines price based on quality, and the quality awareness of cotton-related enterprises has increased significantly. Processing companies face the market directly and bear the risk of market fluctuations, and establish industrial alliances with production and seed companies to improve processing quality and ensure cotton quality. The textile and garment industry is also accelerating upgrading and transformation, developing mid-to-high-end markets, optimizing internal management, and reducing corporate costs. With the advancement of the "Belt and Road" construction, the correlation between domestic and foreign cotton markets will further increase, Xinjiang cotton.


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