December 20, 2001	Thursday	Shawwal 4, 1422

SHANGHAI, Dec 19: China’s cotton output is estimated at 5.32 million tons this year, the semi-official China News Service said on Wednesday, which would be the biggest harvest in 10 years and the third largest in almost 50 years.

But traders expect less production next year as falling domestic prices are likely to discourage farmers in China, the world’s top cotton producer and consumer, to grow more.

Last year, China’s cotton output was 4.35 million tons according to the State Statistical Bureau, which declined to comment on the China News Service report.

The report said more than 20 per cent rise, better than expected, resulted from farmers planting more cotton after prices rose, favourable weather in major cotton planting regions and better growing methods.

“This year, there were no major weather problem or insect damage, except for a little problem in the north,” said Tao Chen, managing director of Allenberg Cotton (China).

Earlier this year, cotton fields in the northwestern region of Xinjiang, which grows 35 per cent of China’s crop, suffered from sudden chills and attacks by aphids and red spiders, but that was no cause for big worries, traders said.

The latest 2001 estimate is higher than earlier forecasts by the government of 4.9 million tons and the Food and Agriculture Organisation (FAO), which put it at 4.7 million tons for the year starting August 1, 2001.

A bumper harvest in 2001 would dim China’s import prospects in the next few months even as the country allows in significantly more shipments at lower tariffs after joining the World Trade Organisation, traders said.

China plants cotton in April and harvests in September and October.

The estimated 2001 output is the biggest since 1991, when China reaped 5.675 million tons, according to statistical bureau figures. The largest harvest recorded by the bureau was in 1984, when China produced 6.258 million tons of cotton.

Cotton acreage this year rose 18.8 per cent year-on-year to 4.8 million hectares, according to official figures. But traders said they expected the area to decline in the next crop year with easing domestic prices.

“Every farmer will think twice whether it might be easier or more profitable to go for other crops like soy or wheat,” said Joachim Oberlander, senior trader at Sincot Pte Ltd in Singapore.

China’s huge harvest is also doing little to help the dismal world market, which has been pinning hopes on more Chinese imports after WTO entry.

Easing domestic prices are also no help. Cotton prices have been falling since April, with the government-backed State Price Information Centre forecasting prices of new standard quality cotton would drop to 7,600 yuan a ton this year, aided by a series of government auctions.—Reuters