WTO'S Decision Requires Developed Countries To Immediately Cancel Cotton Export Subsidies.

The WTO (WTO) recently decided at the annual ministerial conference that, from 2016, the least developed countries should be allowed to export cotton to the developed countries in a tax-free and quota free manner, covering three aspects: market access, domestic support and export competition.

With the implementation of the WTO decision, the 35 least developed countries in the world and four major cotton producing countries in Africa (Burkina Faso, Benin, Chad and Mali) and other developing countries will be exempted from duty from 2016.

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In terms of market access, WTO has given the least developed countries free tax and quota free export to developed countries since January 2016, and promised nothing.

And quota free developing countries.

In terms of domestic support, WTO recognised the reform of cotton policy in member countries and stressed that more efforts needed to be made.

In terms of export competition, WTO's decision requires that the developed countries immediately cancel the export of cotton.

Developing countries are implementing this requirement later.

WTO Secretary General Roberto said that the decision on cotton export subsidies was part of WTO's commitment to cancel farm export subsidies and the biggest achievement in agriculture since the establishment of WTO in 20 years.

WTO Member States, especially developing countries, have been asking WTO to take action on this issue to eliminate the serious distortions caused by these subsidies to domestic cotton production and trade.

Today's decision is a one-off and thorough solution.

Related links:

2015 is not easy for all links in the cotton spinning industry chain.

Cotton growers cried for cotton cultivation and worked hard all year round, and cotton enterprises shouted that the quality and quantity of the purchase were double, the processing was difficult, and the sales were difficult; the textile enterprises shouted that domestic cotton was expensive, imported yarn was fierce, cotton yarn was sold on credit, and grey cloth and clothing enterprises also shouted cloth and clothing, and the money became stock.

Every link is miserable. In the final analysis, it is closely related to the macro economic environment.

At present, China's economy is still in a downward channel, the fourth quarter of the data are not optimistic, it is expected that the economic downturn will continue until the first quarter of 2016.

The deterioration of the macro economic environment in China will inevitably have a certain impact on all walks of life, especially in the cotton spinning industry.

Little things depend on themselves and events to see the country.

In the past year, we have seen that in order to cope with the economic downturn, the central bank has lowered interest rates 6 times. The central government has also adopted many stimulant policies, but little effect has been achieved. It also shows that the current economic problems in China can no longer be solved solely by stimulating policies. The supply side reform is needed, starting from supply and production end, and by improving the competitiveness of the productive forces and promoting economic development.

Specific to our cotton industry, we will think of cotton reserves when it comes to supply.

Recently, we received a lot of requests from our customers, hoping to know the cotton year, quantity, quality and price of the previous cotton reserves, so as to calculate the quality structure of the present cotton reserves.

Although there are some problems in the implementation of the temporary purchase and storage policy, when the domestic cotton has structural problems, people will still put their hopes on the cotton reserves.

When to turn out the cotton reserves and what price to turn out and which cotton to turn out will become the focus of attention.

During the period from July 10, 2015 to August 31st, the principle of "rotation of cotton reserves" was "to promote sustained and healthy development of industries, to guide the smooth operation of the market, to reduce the financial burden, and to improve the regulation mechanism of cotton reserves".

This has changed with the statement that the reserve policy "two guarantees and a stable" (stable cotton production, operators and cotton enterprises market expectations, protecting the interests of cotton farmers, and protecting the market supply) has changed. The state will lighten the financial burden as a principle for the rotation of cotton reserves.

There are two ways to lighten the financial burden. One is to go out at a high price, to narrow the difference between the price of the round bid and the purchase and storage price, and to reduce the direct financial loss. The two is to go out at the market price or below the market price, thereby reducing the inventory and reducing the expenditure of the state finance in the storage cost.

Predictably, under the current market situation, the high price round is obviously not feasible, and the paction will be unsatisfactory. It is also a waste of time and effort for the state to work out the plan and coordinate all the links to the final result.

On the contrary, it is low price, even in line with the international cotton price. Reserve cotton has the advantage of price and abundant resources. Under such circumstances, although the national finance seems to have lost the difference between the reserve price and the bid price, it actually not only revitalized the small and tight textile enterprises, but also promoted the recovery of cotton consumption, and also achieved the goal of eliminating inventory and reducing the financial burden.