We've all had to sit through slide shows of vacation trips. It's difficult to imagine anything more boring than having to endure hours of tedious commentary about the joys of Disney World or some other tourist Mecca and bad photography.
Any trepidations that participants in the Beltwide Cotton Conferences might have had about watching the slides from John Pucheu's “vacation trip,” were quickly forgotten, however, as Pucheu began discussing the Chinese cotton industry, a subject that is becoming ever more dear to U.S. industry members' hearts.
Pucheu, the National Cotton Council's vice chairman, was one of a 10-member delegation that toured portions of China's cotton-producing and textile industry areas in late October. Pucheu and John Mitchell, a Memphis merchant, reported on the trip at the Beltwide.
The trip by the NCC delegation, led by Council Chairman Allen Helms, was part of an ongoing information exchange by the U.S. cotton industry and the China Cotton Association.
“China has a population of 1.3 billion people,” said Pucheu, who farms in Tranquility, Calif. “About 800 million people reside in the countryside and 500 million people in the cities. Incomes in the urban areas are about three times that of the rural areas.
“It is important to China that the migration to cities be orderly so the cities will not be overwhelmed by people moving in from the country. If you wonder why the price the Chinese farmer is paid is so much higher than what you receive, this is one of the primary reasons.”
Nearly 40 million Chinese farmers grow at least some cotton. Most farm one-third to one-half acre of cotton. Average yields with rain-grown cotton in China are about 2 bales per acre.
China is the largest cotton producer at 30 million bales and the largest cotton consumer at the mill level, processing 50 million bales. It is also the largest importer at 17 million bales and purchased more than 9 million bales of U.S. cotton last year.
“China keeps its prices paid to the farmer higher than the world price through import quotas and tariffs,” Pucheu noted. “This forces Chinese mills to bid up the local price, although, in most cases, mills in China would prefer to buy imported cotton because it is cheaper and shipments can be more timely than from parts of China.
“In general, Chinese mills prefer U.S. cotton over Chinese growths due to the quality difference, but the mills have been experiencing some problems with U.S. cotton that need to be addressed.”
Delegation members were guests of the China Cotton Association, an organization representing producers, ginners, merchants, warehouses, textile industry, cotton equipment manufacturers and cotton researchers that was begun in 2004 and is modeled after the NCC.
Cotton Council staff members have worked with the CCA in China and the NCC has been host to a staff intern from the CCA. While they were in China, the delegation approved a memorandum of understanding for CCA and the NCC to work more closely in promoting cotton.
Although it is roughly the size of the continental United States, China's supply of land is limited and fully developed with the exception of Xinjiang province. The eastern part of China is losing land every year as developers erect new factories, housing, freeways and other structures.
Among those projects are more facilities for synthetic fibers. “Currently, China has limited interest in promoting the domestic use of cotton products in China because they would rather use domestically produced man-made fiber instead of imported cotton,” said Pucheu.
The delegation also traveled to Urumqi, the capital of Xinjiang, China's largest cotton producing province. Xinjiang, which produced 10 million bales of cotton in 2006, is a desert with conditions similar to California's San Joaquin Valley.
Roughly 50 percent of its production is controlled by demobilized military — the Xinjiang Production and Construction Corps — which is controlled by the central government and local authority. Farms in the Corps' area have much larger fields than in traditional Chinese agriculture.
“We actually didn't see any mechanical harvesting in this region, and we were told that about 10 percent of the Corps cotton is machine-picked,” said Pucheu. “Labor shortages have occurred, and workers have been brought in from the rest of China. Because of labor problems, the Corps has a goal of increasing machine harvest to 30 percent.”
In the countryside, the delegation saw larger fields being worked by tractors and a considerable amount of cotton being handpicked for the third or fourth time. “When they were finished, there is not a lock left on the plant or on the ground.”
Most of the cotton was planted in one-meter rows (39 inches) with a double row on the bed and plastic covering over the top of the row, said Pucheu. The plastic allows growers to plant two to three weeks earlier, which can be important because the latitude of Urumqi is about the same as northern Iowa.
Chinese researchers are working on plans to install drip irrigation to conserve water. “I have visited with several people who are familiar with the cotton situation in Xinjiang. They say not all of the water resources are fully developed and the acreage could be significantly expanded if those are developed.”
Xinjiang is connected to the textile mills in eastern China by a single rail line. Cotton has to move as far as 2,000 miles to get to Shanghai where mills are located. Xinjiang cotton association leaders say another rail line should link eastern China with Xinjiang by 2010.
“I think the future of our industry will be in China,” said Pucheu. “Retail consumption is rising rapidly as they become more prosperous. Of course, these opportunities also bring challenges for the U.S. cotton industry. China's textile mills can choose between buying cotton from not only the United States, but from countries like India, Australia and Brazil.”