China's cotton production will increase as Xinjiang compensates for drought-stricken areas

Beijing: Despite a sharp decline in production in the Yangtze River region due to the drought, industry reports predict that China's overall cotton production will rise by 5.8% year over year this year.

According to the China Cotton Market Monitoring System report, the nation's total cotton production is projected to reach 6.138 million tonnes in 2022, of which 5.634 million tonnes are anticipated to be produced in the Xinjiang Uygur autonomous region.

The China National Cotton Reserves Corporation and the Ministry of Agriculture in China conducted the survey across the country from late October to early November.

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The report also predicted that cotton production in Xinjiang and the province of Gansu in northwest China would rise by 7.2% and 22.8% annually, respectively.

Due to the severe drought that the area experienced over the summer and a higher level of pest infestation, production in the southern Yangtze River Basin is predicted to fall by 8.6% annually to 152,000 tonnes.

Additionally, the Yellow River Basin in northern China is anticipated to report a 7.1% year-over-year decline to 308,000 tonnes as a result of recurrent droughts and torrential rain that hampered cotton growth.

Due to higher temperatures than in previous years and further increases in the planted area, Xinjiang is predicted to continue producing more than 91% of the nation's total output.

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Deliveries this year have slowed due to labour shortages brought on by strict coronavirus controls, lower-than-expected cotton prices that have a negative impact on farmers' confidence in selling, and last year's production of nearly 20% of the world's cotton in Xinjiang.

According to data released by the China Cotton Association on Tuesday, the average price of cotton in China is down 44.6% compared to last year, and cotton stocks are expected to increase 1.8% to 8.467 million tonnes.

As demand for cotton in China weakened in October as a result of a slowing global economy, a weakening textile sector, and rising global inflation, cotton stocks in China are likely to come under further pressure.

The cotton market has also been hurt by the Uygur Forced Labor Prevention Act of the United States, which went into effect in June.
The law has effectively prohibited American imports of any goods that are entirely or partially made in Xinjiang, where China has been accused of violating human rights by using forced labour against Uygur Muslims and other minorities. Beijing has consistently denied these accusations.

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The USDA stated in its November update that "lower yarn imports and domestic cotton consumption are driven in part by domestic cotton lockdowns, foreign trade policies banning imports of China's cotton products, and slowing global demand for apparel."

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