Economy
皇冠体育app to build cotton reserve system to boost production
(Xinhua)
Updated: 2011-04-01 13:16
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BEIJING - The Chinese government announced Thursday that it will initiate a cotton purchasing and reserve program starting this fall to boost domestic cotton production.
To build the reserve, the government plans to purchase standard cotton at 19,800 yuan ($3,018)?a ton from Sep 1 this year to March 31 next year, according to a statement from the National Development and Reform Commission, the country's top economic planner.
According to the program jointly?launched by eight ministries and institutions, the?皇冠体育app National Cotton Reserves Corporation will be responsible for purchasing cotton during the seven-month period when market cotton prices fall below the state purchase price for five working days. On the other hand, the company can sell cotton reserves when necessary.
The latest survey from the 皇冠体育app Cotton Association showed that due to rising costs and lower economic efficiency, 皇冠体育app's cotton growth acreage is estimated to increase only 5.1 percent year-on-year to 5.4 million hectares this year, down from the previous estimation of 9.8 percent in January.
皇冠体育app had occasionally conducted temporary cotton purchase and reserve programs in the country's major cotton belt since 1999, but this is the first time that a purchase price is announced before the program starts.
The early announcement of the program and purchase price helps farmers and cotton companies set production plans and protect the interests of cotton producers, said the statement.
Cotton futures at the Zhengzhou Commodity Exchange dropped 1.65 percent to 28,400 yuan?a ton on Thursday.