China 2015 cotton output down to 5.6mn tons, decline by 9.3pc

China produced 5.605 million tonnes of cotton in 2015, 574,000 tonnes fewer than in 2014, or down 9.3 percent year on year, and total cotton-growing area stood at 3,799,000 hectares in 2015, down 10 percent from 2014, due to decline in planted acreage for this year’s crop according to the National Bureau of Statistics revealed on Friday.

The figure is higher than recent trade estimates, many of which put this year’s cotton output at less than 5 million tonnes after poor summer weather pulled down yields.

China has a state stockpile of close to 11 million tonnes of cotton, due to a now-abandoned state scheme to support farmers. Efforts to sell off some of its stocks earlier this year had limited success, partly because of weak demand for cotton fibre from the downstream market, a trend that has persisted for much of the year.

Prices on the Zhengzhou Commodity Exchange drop to a low of less than 11,500 yuan ($1,775) per tonne last week, despite the smaller crop, underscoring the market’s weakness. Demand continues lacklustre both in (China’s) domestic and import markets, said cotton merchant Reinhart in its weekly report.

Traders do not expect China’s smaller crop to lead to stronger demand for imports with Beijing keen to restrict overseas buying to boost consumption of its domestic stocks. High temperatures in Xinjiang this summer caused a high rate of shedding of cotton bolls, or pods containing the fibre’s seeds, reducing yields and the length of the region’s prized long-staple fibre.

Rainy weather and early cold weather later in the year further reduced output, said traders. The statistics bureau estimates output in the region – which usually produces around 60 percent of China’s cotton – at only 3.5 million tonnes.

Output in other parts of the country was largely impacted by a smaller planted acreage, with provinces outside Xinjiang planting 16.5 percent less cotton than in 2014, said the bureau.

Weakening cotton prices since the beginning of this year dampened cotton growers’ planting and caused a slump of cotton planting area and output.