China has extended the Xinjiang cotton target-price mechanism for ****–****, fixing the reference level at RMB **,*** per tonne, or roughly $*,*** at late-May **** exchange levels. The immediate objective is farmer income and acreage security. The commercial effect is broader: it gives spinners, fabric mills and garment exporters a visible cotton floor at a time when raw-material volatility is again moving up the sourcing-risk agenda.
USDA’s May **** cotton outlook sharpens the point. World cotton mill use is forecast at ***.* million bales in marketing year ****–**, a six-year high, while production is projected to fall * per cent to ***.* million bales. In that setting, China’s policy is less about making cotton cheap and more about making the upstream textile chain bankable.
