Chinese C production increase brings further shock to its textile enterprises & global C price

The C production in Xinjiang China is expected to increase 4% this year, for which the global C price will face a down pressure and the textile exporters will face a further shock.

China is the biggest C producer, consumer and importer in the world. If the expected realized, Chinese import C qty will decline, at the same time, its domestic C storage will increase.

Xinjiang Uygur Autonomous Region, the largest C cultivated area in China, produces nearly a half qty of the nation. Its government announced last Friday that from 1st Aug. 2012 to same period next year the C production qty expects to reach 3.2 million tons, up 4% over the same period last year.

The C yield increase in Xinjiang will balance other areas' decline for lesser growth, also sharpens the imbalance of domestic oversupply. Though China government haven't declaimed the expection, according to Xinjiang official data, Chinese total C production will up to 6.5 million T 2012, down slightly than 6.6 million T last year; while, it is expected to be 6.76 million T by American Agriculture Department.

To guarantee peasants' income, China worked out a reserve program last year and reached its C storage to 3.2 million T, top 1 in the world.

However, the restriction of official purchase and import lead to its domestic C price higer that global price, which shocks the Chinese textile enterprises greatly.

Chinese C price on spot market is about RMB 18500/T, still higher 20% to 30% than that of America, Austrilia and India.

"Due to the enough storage and slowly global economic growth, China will cut down its C import to 2.6 million T," Internation Cotton Advisory Committee added in earlier Aug.