Hubei is one of the largest cotton-producing provinces in the south. In 2008, growers planted 433,333 hectares to cotton, which represented a 15,333-hectare increase; however, this season, farmers are likely to be rather disappointed with cotton. Problems began when input costs rose an average of 3,000 yuan per hectare, followed by extremely wet weather in August, which damaged the quality of the crop. Now growers face a sharp decline in seed cotton prices.
Picking of new cotton is now underway, and seed cotton has begun arriving at gins, but moisture content of arrivals is very high and the quality of the crop has been reduced. Local cotton lint prices are currently at 100 to 500 yuan per ton below year-ago price levels, forcing seed cotton prices to 5.2 - 5.6 yuan per kilogram (compares to 6.0 to 6.4 yuan per kilogram last year). Given high moisture content and lower quality, some ginners have reduced seed cotton prices to 4.8 yuan per kilogram. At these price levels, farmers face low profits or even losses. |
