China will take multiple steps to combat the falling price of cotton, according to National Development and Reform Committee (NDRC), the country's top economy planner.
Market statistics showed that the purchase price of standard cotton averaged 12,553 yuan per tonne (US$1,838) on Tuesday. That is 68 yuan lower than the previous trading day.
The figure was down 677 yuan or 5.1 percent from the same trading period last year.
"Both short-term and long-term measures are needed to stabilize the price of cotton, so as to protect the nation's cotton production as well as the interests of farmers," said NDRC's trade and commerce official Ma Zhanping at a cotton forum on Monday.
According to Ma, the country will encourage commercial banks and rural credit institutions to provide more loans to fund cotton purchases.
China is also expected to purchase more cotton and put it in a state reserve in the Xinjiang Uygur Autonomous Region in hopes of slowing down falling cotton prices.
Xinjiang is China's largest cotton producer. Its output accounts for 36 percent of the country's total cotton in 2007.
As of August 2008, state departments had purchased 65,800 tonnes of cotton.
Ma said the country was also working on a plan to strengthen financial support for farmers, which could include subsidies.
"The textile industry has been suffering from shrinking global market demand. By giving subsidies to farmers, we could support the cotton industry while avoiding putting more pressures on textile and garment manufacturers," said Ma.
(Xinhua News Agency October 15, 2008)