Govt policy to create stability in Chinese textile sector

China’s textile experts point out that industrial policy will continue to play an important regulatory role in 2012, and will effectively prevent cotton price from soaring and plummeting.

Total purchase volume of cotton reserves is expected to exceed three million tons in current year, which is equivalent to nearly half the cotton output of the current cotton season.

Quota policy of cotton imports will also play a more important role in adjustment of domestic cotton price.

Bumper cotton yield this year has severely depressed cotton prices this year and the market widely expects cotton acreage to decline 9 percent in 2012-13 season.

Raw cotton demand is expected to total about 9.5 million tons in 2012. Domestic textile industry will remain stable under the context of slowdown growth or even slightly decline of textile and garment exports, and enhanced potential of domestic sales.

Domestic cotton price is clearly stronger than currently imported cotton, the parity is as high as 1.15. Imported cotton price begin to rise being driven by domestic cotton price.