China Decreasing Cotton Acreage

Following an earlier survey of 2,800 cotton-farming households in January, the Shandong Agricultural Department just released results of a second survey covering 33 counties across the province that point to a similar decline in cotton plantings. The report suggests cotton farmers will plant -13.2% less land to cotton this spring than last year, closely matching the -13.9% decrease in the earlier survey. Following a similar mantra of lower cotton area in favor of increased grains noted across other provinces, the department’s report indicates that total planted area will be relatively unchanged, but plantings of specialty crops and grains will expand, while cotton area will likely decline 116,800 hectares from last spring’s record area to 771,467 hectares (1.9 million acres).

Acreage in Hebei, another key cotton producing province, is on the wane too. Plantings in this province are forecasted to slide -7.1% to just over 641,000 hectares (1.6 million acres). Lower procurement costs for cotton from a year earlier—down -27.8% to just 4.55 yuan per kilo—are the primary reason prompting farmers to shift land into other crops—particularly grains. Given data from the Hebei Bureau of Statistics indicating the current crop reached 737,000 metric tons, if yields and abandonment in the forthcoming crop are comparable to this year, Hebei production in 2009/10 may fall -7.1% from this year to less than 685,000 tons (3.1 million bales).

Cotton area in Jiangsu Province is likely to fall between 20-30% this Spring, as production shifts to corn, soybean, and other specialty crops. This concurs with similar double-digit acreage declines anticipated in Xinjiang Province and Shandong Province as mentioned earlier in the article. The key reasons for the switch are anticipated higher production costs this year and government-funded subsidies for the production of select specialty crops.