The new cotton purchase and sale system is speeding up the construction of a gap between domestic cotton production and demand.

At the recent national teleconference on cotton work, Lian Weiliang, deputy director of the National Development and Reform Commission, said that domestic cotton demand will recover in the new year, and the gap between domestic production and demand is expected to be about 2 million tons. However, the domestic cotton market still has favorable conditions for maintaining stable operation.

The reporter learned that with the launch of the pilot project of cotton target price reform in China, major changes have taken place in the operating environment of the cotton market. China will speed up the exploration and construction of a new cotton purchase and sale system that gives full play to the role of the market mechanism and the government.

There is a gap between domestic cotton production and demand.

In 2013, China's domestic cotton production was generally stable, but under the influence of the international and domestic economic situation, the textile growth rate declined, the cotton demand decreased, and the gap between production and demand narrowed; the international cotton supply exceeded demand and prices fell, and the price difference between internal and external cotton was still at a high level; the pressure to protect the interests of cotton farmers and stabilize textile development increased.

In order to deal with this situation, the state launched temporary collection and storage in time, collecting and storing a total of 6.58 million tons of cotton at a price of 20400 yuan per ton, accounting for more than 90 percent of the total cotton output in that year, effectively protecting the interests of cotton farmers. At the same time, by reasonably arranging the delivery price and grasping the quantity, rhythm and quality structure, the demand gap is made up and the demand for cotton for textile use is ensured; through the reasonable arrangement of cotton import, the needs of textile export and cotton distribution are met, and textile production and export are stabilized.

"in 2013, the price of cotton in China's domestic market was roughly the same as that of reserve cotton, and the cotton market remained basically stable." Lian Weiliang, vice minister of the National Development and Reform Commission, said that in 2014, China's domestic cotton market demand has recovered, and major changes have taken place in the relationship between cotton production and demand supply and demand.

According to a survey conducted by the China Cotton Association, the national cotton planting area this year is 63.4 million mu, down 9.4 percent from the previous year, and the output is about 6.5 million tons, a decrease of 500000 tons over the previous year. Among them, the areas of the Yangtze River Basin and the Huang-Huai-Hai Basin have declined a lot due to the rise in cotton production costs, the decline in the comparative efficiency of planting cotton, and the cancellation of the temporary collection and storage policy; as a result of the implementation of the target price reform pilot policy in Xinjiang, the cotton planting area has remained basically stable.

In terms of market demand, after the cotton price in the new year is formed by the market, the price difference between internal and external cotton is expected to narrow, which is conducive to curbing the substitution of chemical fiber and reducing cotton yarn imports, and cotton demand will also recover to some extent. The demand for cotton in the new year is expected to be about 8.5 million tons, an increase of about 500000 tons over the previous year. Based on this, it is estimated that the gap between domestic cotton production and demand in the new year is about 2 million tons, an increase of about 1 million tons over the previous year.

"there is a gap in domestic cotton production and demand in the new year, but the reserve and import arrangements are controllable, and there are favorable conditions for maintaining the smooth operation of the domestic cotton market." Lien Weiliang said: as long as we properly handle the relationship between new cotton sales, reserve release, and import arrangements, the relationship between protecting farmers' interests and improving textile competitiveness, and the relationship between market prices and government regulation and control, we can guide the market cotton prices to operate within a reasonable range and maintain the total balance of domestic cotton supply and demand and the basic stability of the market.

Do a good job in market guidance and regulation

As early as 2011, China established a temporary cotton collection and storage system, which played an important role in protecting the interests of cotton farmers and stabilizing cotton production. However, in recent years, with the continuous decline of cotton prices in the international market, China's cotton market is faced with some problems, such as the high price difference between internal and external cotton, the weakening of market mechanism, the sharp increase of national storage quantity and inventory, and the weakening of textile export competitiveness.

At the beginning of this year, the state launched a pilot project to reform the target price of cotton in Xinjiang, while abolishing the temporary collection and storage policy nationwide. After the implementation of this policy, both Xinjiang and the mainland have realized that the new cotton price is mainly formed by the market, and the cotton circulation has returned to the market in a real sense.

"after the cotton market-oriented reform, the state should further strengthen and improve macro-control in the light of the current cotton production and marketing situation and the needs of promoting reform, do a good job in balancing the total amount of cotton, and guide the smooth operation of the market." Lian Weiliang said.

It is understood that in order to make room for the sale of new cotton, after the beginning of the new year, the state has suspended the release of cotton reserves to guide enterprises to actively purchase, process and sell new cotton. After the purchase and processing of cotton is basically completed in March next year, when the market is in short supply and prices rise to a certain extent, the state will, depending on the progress of new cotton sales, re-release some reserve cotton in accordance with the principle of not suppressing the market to meet market demand.

At the same time, next year, China will do a good job in cotton import according to the domestic cotton supply and demand situation, in addition to issuing the tariff quota of 894000 tons promised by China's accession to the WTO, it will not increase the import quota in principle, and guide domestic textile enterprises to make more use of domestic cotton.

Liu Kun, vice minister of the Ministry of Finance, believes that in order to maintain the basic balance between domestic cotton supply and demand and the relative stability of domestic cotton prices, market adjustment must be done in a timely and appropriate manner. On the one hand, it is necessary to control the import quantity of cotton and prevent low-price imported cotton from impacting the domestic market; on the other hand, it is necessary to closely follow the cotton market situation, strengthen the management of cotton reserves, improve market regulation, stabilize market fluctuations, actively digest national cotton reserves, and grasp the total amount and opportunity of putting cotton reserves on the market.

The new system emphasizes the role of the market

"this year is the first year of the pilot project of cotton target price reform. the market environment has changed greatly, and the task of cotton purchase and sale is heavy and difficult." Lian Weiliang said that China will actively and steadily promote reform, achieve a smooth transition between new and old mechanisms, and at the same time correctly handle the relationship between the government and the market.

The reporter learned that China will explore the establishment of a new market-oriented cotton purchase and marketing system to meet the requirements of the new situation. Lien Weiliang revealed that the new cotton purchase and sales system will give full play to the role of the market mechanism, so that cotton acquisition and processing enterprises will generally become the market main body of truly independent management, self-responsibility for profits and losses, and self-development.

At the same time, we should further improve the construction of cotton market system, improve the trading rules of cotton spot and futures markets, form a unified, open, competitive and orderly market circulation system, take the market as the guidance, cultivate cotton cooperative organizations, and actively promote industrial management. We will continue to give full play to the traditional advantages of supply and marketing cooperatives taking root in rural areas, connecting with cotton farmers, and covering a wide range of points, speed up the pace of market-oriented reform of cotton enterprises in the supply and marketing system, and actively develop cross-regional, cross-ownership, trade, industrial and agricultural integration of cotton enterprise groups.

Liu Kun also said that China will continue to do a good job in the pilot reform of cotton target prices, and the Ministry of Finance will timely measure and allocate subsidy funds in accordance with the pilot plan approved by the State Council, and support non-pilot areas to adapt to policy changes. we will comprehensively formulate specific plans to support the development of the cotton industry under the new situation, so as to promote the healthy development of the cotton industry.

"after the marketization of cotton purchase and sale, all relevant departments and localities should conscientiously do a good job in supervision and services, not only to prevent excessive government intervention, but also to prevent the problem of inadequate supervision." Lian Weiliang said.

The reporter learned that the National Development and Reform Commission has asked relevant departments and localities to strengthen the supervision of cotton purchase links and maintain the cotton market order; strengthen the management of cotton purchase and sale contracts and processing behavior; cultivate honest and trustworthy main bodies of the cotton processing market; coordinate financial institutions to do a good job in the supply of cotton purchase funds, reasonably determine the loan threshold, and scientifically arrange credit plans to avoid delinquency. In addition, it is necessary to strengthen the supervision of cotton quality, strengthen the supervision of the futures market, give full play to the function of the futures market in "discovering prices and hedging", and severely crack down on excessive speculation in the futures market.