China Monthly Cotton Report

Beijing Shennong Kexin Agribusiness Consulting Co.
, Ltd
China Monthly Cotton Market Report

March 2010
I. Cotton Market in March ..................................................................................................... 3

Yarn Price Increase Outstrips Cotton Price Increase. Spinning Industry Profit Advancing................ 3
II. Cotton Market Information in March .............................................................................. 4
1 Domestic Cotton Supply in 2009/2010 Tends to Tight .................................................................... 4
2 The Cotton Growing Areas in 2010 is Hard to Recover .................................................................. 4
3 The Demand for High Account Yarn is Increasing Long Staple Cotton Price Increases .............. 5
4 Prices of Cotton Yarn Will Continue to Increase.............................................................................. 6
III. Cotton Growing Situation and Forecast in March......................................................... 7
Growing Areas in 2010 is Hoped to Remain the Same as Last Year .................................................. 7
IV. Analysis of Cotton Import in February ........................................................................... 7
1 Cotton Imports Record 221,000 MT, Up 2.86 Times....................................................................... 7
2 India Still Remains as the Largest Cotton Import Origin Country, but Down by 44.7% from
Previous Month ................................................................................................................................... 7
3. Xinjiang Increases 741.8% from Last Month in Imports................................................................ 8
4 Imports at Urumqi Customs Increased 2% from Previous Month ................................................... 8
5 General Trade Became the Major Import Trade Mode .................................................................... 8
V. Analysis of Economic Situation of Textile Industry in February .................................... 9
1 Yarn Production Is 1.56286 Million Tons, Up 8.3% from the Same Period Last Year .................... 9
2 Yarn Production in Jiangxi and Sichuan Increase Significantly....................................................... 9
3 Cotton Cloth Production Rises 37.91%............................................................................................ 9
4 Cotton Cloth Exports Increases 58.25% Year-on-Year .................................................................. 10
5. Textile and Apparel Exports Dropped by 18.8%........................................................................... 10
VI. Analysis of Cotton Supply and Demand........................................................................ 10
1 Forecast Increase in Consumption and Imports in 2009/10 ........................................................... 10
Attached Tables ...................................................................................................................... 11
Attached Table 1, China’s Cotton Production Forecast, 2009........................................................... 11
Attached Table 2, China Uncombed Cotton Import Volume by Original Country, February 2010 .. 11
Attached Table 3, China Uncombed Cotton Import Volume by Province, February 2010 ............... 12
Attached Table 4, China Uncombed Cotton Import Volume by Customs, February 2010 ............... 13
Add: No.99, Zhongguancun East Road, Haidian District, Beijing 100190, PRC
Tel: 86-10-62589781 Fax: 86-10-62589754 E-mail: info.bj@sn110.cn Website: www.bjsn110.com
Page 1 of 22
China Monthly Cotton Market Report Beijing Shennong Kexin Agribusiness Consulting Co., Ltd
Attached Table 5, China Cotton Import Volume by Mode, February 2010 ...................................... 13
Attached Table 6, China Yarn Production by Province, February 2010............................................ 13
Attached Table 7, China Textile and Apparel Export Value by Month, 2009～2010 ....................... 14
Attached Table 8, China Cotton Supply and Demand, 2005/06～2009/10....................................... 15
Attached Table 9, Global Cotton Supply and Demand, 2005/06～2009/10 ..................................... 15
Attached Table 10, Global Cotton Supply and Demand, 2005/06～2010/11 ................................... 15
Attached Figures .................................................................................................................... 16
Attached Fig. 1, China Uncombed Cotton Import Volume by Month, 2006-2010 ........................... 16
Attached Fig. 2, China Uncombed Cotton Import Price (CIF) ......................................................... 16
Attached Fig. 3, China Uncombed Cotton Imports by Original Country, February 2010 ................ 17
Attached Fig. 4, China Uncombed Cotton Imports by Province, February 2010 ............................. 17
Attached Fig. 5, China Uncombed Cotton Imports by Customs, 2008~2010................................... 18
Attached Fig. 6, China Uncombed Cotton Imports by Mode, February 2010 .................................. 18
Attached Fig. 7, China Yarn Production by Month, 2007-2010........................................................ 19
Attached Fig. 8, Yarn Production of Major Producing Regions, February 2010 .............................. 19
Attached Fig. 9, Yarn Production of Major Producing Regions, Jan-Feb. 2010 ............................... 20
Attached Fig. 10, China Cotton Cloth Production by Month, 2007-2010 ........................................ 20
Attached Fig. 11, China Cotton Cloth Export Volume by Month, 2007-2010.................................. 21
Attached Fig. 12, China Textile and Apparel Export Value, 2006-2010 ........................................... 21
Attached Fig. 13, Cotton Prices in CNCE, ZCE and ICE, 2008-2010.............................................. 22
Attached Fig. 14, Exchange Rate USD to RMB of Imports & Exports............................................ 22
Page 2 of 22
I. Cotton Market in March
Yarn Price Increase Outstrips Cotton Price Increase. Spinning Industry Profit
Advancing
Due to the economic recovery, international orders start to pick up, and sales of yarn and
cloth have increased too. Textile companies continuously adjusted up yarn prices. Price of
pure cotton yarn has increased significantly. On the other second, labors for textile companies
are insufficient and production capability is restricted, and as a result, the supply of yarn falls
short. In some regions, customers are lined up for the products.
After the Spring Festival, Xinjiang has slowed its pace of transporting its cotton to other
regions and cotton supply has becomes insufficient. Both the prices of cotton and yarn have
indicated increase.
Average prices of 32S cotton yarn was RMB22,428/MT in March, an increase of

RMB1182/MT. Meanwhile, CN Cotton B Index, climbed to RMB15,512/MT, an increase
of RMB576/ton. The spinning profit was 1508yuan/ton, an increase of RMB569/ton.
Figure 1, Processing Profit of Cotton Textile Industry, 2007-2010
Uint: RM B yuan/M T
2,000 16,000
1,500 15,000
1,000 14,000
500 13,000
0 12,000
-500 11,000
-1,000 10,000
2007/03
2007/05
2007/07
2007/09
2007/11
2008/01
2008/03
2008/05
2008/07
2008/09
2008/11
2009/01
2009/03
2009/05
2009/07
2009/09
2009/11
2010/01
2010/03
Processing Profit Cncotton B(328)
Page 3 of 22
II. Cotton Market Information in March
1 Domestic Cotton Supply in 2009/2010 Tends to Tight
Recently, State Statistic Bureau announced domestic output of cotton in 2009/2010 is 6.4
million tons. Taking the consideration of cotton imports and transportation of Xinjiang, the
market supply for domestic cotton tends to be tight.
1.1 The import volume of cotton from the international market is limited
According to March report from the U.S. Agricultural Department, the year end cotton
inventory in the U.S. amounted to 697,000 tons and 1.867 tons for India. The year-end
inventory of other countries is small. And as a result, the volume that is available for
importing to China is limited.
1.2 Xinjiang slows down its pace of transporting cotton to other regions.
According to the relevant department, from September 2009 to the end of Feb 2010, Xinjiang
has transported 1.49 million tons of cotton by rail, and there is about 1.5 million tons of
cotton to be shipped. Based on the transportation pace of first six months, monthly shipping
volume amounted to 250,000tons. The cotton that stored at the train station won’t be all
shipped to inland till August.
2 The Cotton Growing Areas in 2010 is Hard to Recover
In 2009, profit of growing cotton increases significantly, but it is foreseen that the growing
areas will be about the same level from last year. The main causes:
2.1 Long Growing Period and Working Days

The growing period for cotton is the longest among all the commodities. Usually, it takes 23
working days to grow 0.067 hectares, four times longer than growing wheat, which is usually
six days.
Page 4 of 22
Table 1 Labor Days Comparison of Wheat, Corn, Rice and Cotton

Wheat Corn Rice cotton
Labor Days/Ha 90 120 135 345
2.2 Low Level of Mechanization and Labor Intensive

Due to the objective reasons, growing cotton still mainly depends on human labor. At present,
young and middle aged farmers have worked in the cities, and most labors remaining are
women and older farmers, and as a result, it’s difficult to accomplish the requisite cultivation
management in the growing procedure
2.3 Policies Favors Grains than Cotton

First of all is buying prices. Cotton buying price is driven by market and there is no
minimum buying price any more. In recent years, government announces plans on lowest
grains buying price before sowing or buying. There are both good quality seeds subsidy and
growing areas for growing grains, while growing cotton only enjoys the subsidy for good
quality seeds, which is about RMB15 every 0.067 hectare.
3 The Demand for High Account Yarn is Increasing Long Staple Cotton Price
Increases
Affected by the economic crisis, international market demand for high end product dropped
dramatically, such as high grade yarn. The profit of high account yarn is lower than common
medium and low account yarns, therefore, many domestic companies have reduced
production of high end cotton products and paid more attention to middle and low level yarns,
leading to demand and price drop for domestic long staple cotton.
In 2010, international market for high end products is recovering, such as high end T-shirt
and knitwear. The market demand for high account yarn is increasing too. Its increase
overtakes the price increase in middle and low account yarns. Given the insufficient supply of
high grade cotton, the price of long-staple cotton continues to increase. Current price of
long-staple cotton (Grade 137) has broken the record of RMB25000/ton.
Page 5 of 22
Figure 2, Long-Staple Cotton Price
Unit: RM B yuan/M T
26,500
24,500
22,500
20,500
18,500
16,500
14,500
2008-03-25
2008-04-29
2008-06-03
2008-07-08
2008-08-12
2008-09-23
2008-10-29
2008-12-02
2009-01-06
2009-02-17
2009-03-24
2009-04-28
2009-06-02
2009-07-08
2009-08-11
2009-09-15
2009-10-27
2009-12-01
2010-01-05
2010-02-09
2010-03-24
137 237 336
4 Prices of Cotton Yarn Will Continue to Increase
This month, quotation of domestic cotton yarn increases by RMB1000/ton. Short of labor still
remains a headache for factories, leading to low operation efficiency and insufficient supply.
In some regions, it requires deposit to buy cotton yarn.
Due to prices increase, downstream cotton and cloth companies involuntarily increase prices.
Price of grey cloth has increased by RMB 0.3 to 0.5yuan.Cotton price has increased by 20
percent. Despite of prices increase, sales of grey cloth is still promising, leading to tight
supply.
Due to cotton prices increase, market supply of yarn becomes tight as well. Downstream
companies are active in buying and it is hoped to see the cotton price will continue to
increase.
Page 6 of 22
III. Cotton Growing Situation and Forecast in March
Growing Areas in 2010 is Hoped to Remain the Same as Last Year
Starting from March, cotton farmers in major producing regions are preparing for sowing
before spring comes. Jiangsu, Hubei, Hunan, Anhui and Southern Henan will enter the stage
of seeds breeding and bowl making at the end of March and the beginning of April. Hebei,
Shandong, Northern Henan, Gansu and Xinjiang will start sowing in the second half of April.
Due to the recent frequent cold spell and sandstorm, cotton seeds sowing have been delayed
in Northern cotton growing regions. Delay also occurs to bowl making in Southern cotton
producing regions.
At present, prices of seeds and fertilizer have increased slightly; meanwhile State continues to
raise the lowest buying price of grains and subsidy, which dampens cotton farmer’s
enthusiasm. It is hoped that the growing area will be about the same level as last year.
IV. Analysis of Cotton Import in February
1 Cotton Imports Record 221,000 MT, Up 2.86 Times
China’s Customs data showed that total cotton imports in February were 221,000 MT, down
by 26.7% month-on-month and up 1.37 times year-on-year respectively. The average price of
imported cotton in January recorded $1721/MT, up 1.3% from last month and up 33.2%
year-on-year. Jan-Feb imports totaled 522,400 MT, up 2.08 times from the same period last
year.
2 India Still Remains as the Largest Cotton Import Origin Country, but Down by 44.7%
from Previous Month
Of the import origins, the India’s share still remains as the largest cotton import origin
Page 7 of 22
country, but the percentage dropped slightly. The U.S.’s share has increased slightly. Cotton
from Uzbekistan remains stable. In February China imported 59,000 tons of cotton from the
United States, accounting for 26.6% of the total imports, up by 15.1 percentage points from
last month. China also imported 95,000 tons from India, accounting for 43% of the total
imports, down 44.7 percentage points from last month. China imported 27,000 tons from
Uzbekistan, accounting for 12.3% of the total, down by 18.5 percentage points from last
month. The share of other import origin countries is less than 3%.
3. Xinjiang Increases 741.8% from Last Month in Imports
In February, the major importing provinces were: Shandong, Jiangsu, Shanghai, Zhejiang and
Xinjiang. Shandong imported 86,600 tons of cotton, down 32.8% month-on-month. Jiangsu
and Shanghai imported 45,300 and 29,800 tons respectively, down by 26.3% and 17.8%
respectively from previous month. Xinjiang imported 10,700 tons of cotton, up by 741.8%
from previous month, which was 1272 tons.
4 Imports at Urumqi Customs Increased 2% from Previous Month
Uncombed cotton imports in February were mainly unloaded in Qingdao, Nanjing, Shanghai,
Tianjin and Urumchi. Imports in Qingdao registered 887,700 tons, down by 32.3% from
previous month. Imports in Shanghai and Nanjing registered as 60,600 and 27,000 tons
respectively, down by 14.6% and 40.1% respectively. Urumchi imported 14,200 tons of
cotton, up by 2% from previous month.
5 General Trade Became the Major Import Trade Mode
In February, imports of general trade have remained as the major import trade mode. The
percentage of imported cotton for processing and transshipment through bonded warehouse
remains stable. The percentage of cotton imports of entry/exit through bonded warehouse
dropped slightly. In February, imported cotton quantity of general trade was registered as
89,800 tons, down 7.3 percentage points month-on-month. Quantity of transshipment through
Page 8 of 22
bonded warehouse was recorded at 60,000 tons, down 32.3 percentage points. Imported
cotton of entry/exit through bonded warehouse recorded as 22,900 tons, down by 60
percentage points month-on-month. Imported cotton for processing recorded as 46,700MT,
down 19.3 percentage points from last month. The quantity of processing with supplied
cotton recorded at 1490 tons, 1.44 times more than previous month.
V. Analysis of Economic Situation of Textile Industry in February
1 Yarn Production Is 1.56286 Million Tons, Up 8.3% from the Same Period Last Year
Yarn production in February 2010 amounted to 1.6286 million MT, up 8% from the same
period last year, down 16.6% month-on-month. Jan-Feb yarn production totaled 3.582
million MT, up 24.9% from the same period last year. It is predicted that the yarn production
in March will still continue to increase.
2 Yarn Production in Jiangxi and Sichuan Increase Significantly
Yarn production in Shandong registered as 456,000 tons, accounting for 28.01% of the total
State’s output. Yarn production in Jiangsu and Henan registered as 276,000 tons and 249,000
tons, accounting for 16.93 and 15.30% respectively of the total output. Production in the
provinces of Zhejiang, Fujian and Hubei exceeded 100,000 MT. yarn production in other
provinces is less than 50,000 tons. Among the major producing provinces, output in Jiangsu,
Hebei, Hunan and Guangdong dropped year-on-year. Yarn output in Hebei dropped by
13.44% year-on-year. Yarn output in other provinces have increased year-on-year, while that
in Jiangxi, and Sichuan increased significantly by 44.91% and 34.72% respectively.
3 Cotton Cloth Production Rises 37.91%
Cotton cloth production in February was 2.91 billion M, up 37.91% year-on-year, which is
800 million M, and 15.2% month-on-month which is 121 million M. Jan-Feb production
totaled 5.44 billion M, up 43.54% year-on-year, which is 1.65 billion M. It is estimated that
Page 9 of 22
the output in March will increase significantly.
4 Cotton Cloth Exports Increases 58.25% Year-on-Year
China exported 459 million M cotton cloth in February, down 25.56% month-on-month or up
58.25% year-on-year. China imported 42 million M cotton cloth, down 24.93%
month-on-month or down 33.28% year-on-year.
Jan-Feb exports totaled 1.076 billion M, up 34.61% year-on-year, and imports totaled 98
million M, down by 15.03% year-on-year.
5. Textile and Apparel Exports Dropped by 18.8%
China’s textile and apparel exports were valued at $152.638 billion in February 2010, down
18.8% from the previous month, and up 89.3% from the same period last year. Textile
exports were valued at $4.567 billion, up 78.2% year-on-year. Apparel exports were valued as
$8.071 billion, up 96.26% year-on-year.
VI. Analysis of Cotton Supply and Demand
1 Forecast Increase in Consumption and Imports in 2009/10
In March, BSNABC adjusts the forecast of cotton consumption in 20096/10 up to 9.896

million tons. The major reason lies in the promising sales. Due to the reduction in cotton
output, the forecast of imports has increased by two million tons. Ending cotton stocks are
estimated at 2.039 million MT. The inventory to consumption ratio should drop to 20.6%,
which was 16.4 percentage points
Page 10 of 22
Attached Tables
Attached Table 1, China’s Cotton Production Forecast, 2009

Unit: 1000Ha, Kg/ha, 1000MT
2008 Acreage 2009 Acreage 2008 yield 2009 yield 2008 Production 2009 Production
Yellow River
Shandong 888 867 1,172 1,062 1,041 921
Hebei 690 620 1,069 976 737 605
Henan 606 537 1,074 964 651 518
Shanxi 89 70 1,198 1,197 107 84
Shaanxi 85 67 1,183 1,200 101 86
Tianjin 69 60 1,199 1,250 83 75
Yangtze River
Hubei 543 460 945 1,044 513 481
Anhui 390 344 932 1,020 363 351
Jiangsu 300 252 1,085 1,016 326 256
Hunan 183 147 1,348 1,469 247 216
Jiangxi 67 61 1,681 1,500 112 91
Northwest
Xinjiang 1,719 1,365 2,051 1,980 3,526 2,703
Gansu 73 67 1,694 1,590 123 107
Total 5,754 4,950 1,389 1,313 7,992 6,500
Date of Forecast: March 2010
Attached Table 2, China Uncombed Cotton Import Volume by Original Country, February 2010
(products of heading No.52010000 in China customs tariff)
Unit: MT
Feb Year Ago YOY (±%) Jan ~ Feb, 2010 Jan ~ Feb, 2009 YOY (±%)
Total 221,025.74 93,072.35 137.48 522,365.19 171,048.18 205.39
India 95,099.83 8,994.58 957.30 267,097.61 14,794.06 1,705.44
United States 58,814.15 48,716.01 20.73 109,893.75 108,432.28 1.35
Uzbekstan 27,205.90 23,132.46 17.61 60,580.05 23,319.03 159.79
Burkina Faso 5,839.18 297.54 1,862.48 10,972.78 493.97 2,121.37
Cameroon 5,108.27 299.89 1,603.40 9,084.38 1,174.70 673.33
Brazil 4,336.18 5,522.95 -21.49 9,289.27 11,600.30 -19.92
Australia 3,075.75 1,964.72 56.55 9,494.51 2,424.71 291.57
Malawi 2,666.14 - 3,357.97 -
Pakistan 2,615.45 - 6,480.30 -
Mexico 2,611.33 1,678.80 55.55 8,302.00 2,675.44 210.30
Turkmenistan 2,423.67 - 3,558.43 -
Egypt 1,722.06 318.49 440.69 3,777.42 757.09 398.94
Zimbabwe 1,501.75 978.65 53.45 1,997.77 978.65 104.14
Page 11 of 22
Senegal 1,304.89 - 2,460.63 -

Cote d.lvoir 1,160.36 - 1,701.95 -
Greece 1,138.36 494.01 130.44 1,440.26 993.76 44.93
Togo 1,136.01 - 1,635.59 -
Sudan 920.18 - 1,177.18 -
Mali 499.65 60.00 732.81 1,640.40 559.99 192.93
Tadzhikistan 348.81 - 850.90 -
Benin 298.44 - 593.88 -
Ethiopia 254.38 - 254.38 -
Zambia 242.17 - 811.19 25.22 3,116.09
Chad 199.87 274.64 -27.23 399.86 474.36 -15.70
S.Africa 174.19 - 564.65 -
Yemen 107.06 - 107.06 -
Syrian Arab Rep. 97.44 99.31 -1.89 97.44 99.31 -1.89
Uganda 79.68 - 139.53 -
Turkey 44.60 - 44.60 -
Attached Table 3, China Uncombed Cotton Import Volume by Province, February 2010
Unit: MT
Total 221,025.74 93,072.35 137.48 522,365.19 171,048.18 205.39
Shandong 86,596.02 35,044.17 147.11 215,469.54 62,323.76 245.73
Jiangsu 45,320.83 16,738.49 170.76 106,781.97 27,143.97 293.39
Shanghai 29,798.87 12,311.36 142.04 66,031.84 29,886.33 120.94
Xinjiang 10,707.15 48.00 22,205.16 11,979.04 2,239.56 434.88
Zhejiang 9,242.56 4,040.29 128.76 23,372.67 7,885.96 196.38
Guangdong 6,324.21 402.26 1,472.18 14,412.69 2,435.07 491.88
Beijing 6,232.74 12,152.62 -48.71 17,332.72 18,467.89 -6.15
Hebei 6,032.68 1,675.30 260.10 12,026.28 2,795.96 330.13
Hubei 6,010.65 2,677.06 124.52 11,072.15 4,321.99 156.18
Tianjin 5,774.32 1,828.17 215.85 18,970.70 3,781.48 401.67
Anhui 3,233.76 - 9,143.34 -
Henan 1,586.34 1,237.87 28.15 7,832.60 3,155.72 148.20
Guangxi 1,346.41 340.07 295.92 1,789.25 615.07 190.90
Liaoning 1,301.35 2,638.92 -50.69 1,497.79 2,927.53 -48.84
Chongqing 988.96 - 988.96 -
Jilin 331.86 576.52 -42.44 626.52 732.96 -14.52
Shanxi 197.03 - 197.03 -
Page 12 of 22
Attached Table 4, China Uncombed Cotton Import Volume by Customs, February 2010
Unit: MT
Total 221,025.74 93,072.35 137.48 522,365.19 171,048.18 205.39
Qingdao 88,712.94 35,590.25 149.26 219,838.31 62,968.25 249.13
Shanghai 60,583.39 24,804.27 144.25 131,480.64 55,692.29 136.08
Nanjing 26,999.67 8,881.33 204.00 72,046.24 13,474.61 434.68
Urumqi 14,239.31 9,587.27 48.52 28,200.09 11,778.83 139.41
Tianjin 14,052.77 5,381.11 161.15 33,366.10 9,686.88 244.45
Wuhan 3,240.93 1,777.41 82.34 6,717.21 3,222.34 108.46
Huangpu 2,264.90 340.07 566.01 4,646.30 1,524.30 204.82
Hefei 2,241.48 - 7,327.42 -
Shantou 1,907.90 - 3,004.84 -
Dalian 1,633.21 3,215.44 -49.21 2,124.31 3,660.50 -41.97
Jiangmen 1,609.19 - 3,595.35 -
Gongbei 997.48 243.66 309.38 997.48 346.39 187.97
Zhanjiang 891.16 158.60 461.89 3,457.99 1,654.20 109.04
zhengzhou 865.93 - 1,865.93 587.64 217.53
Ningbo 785.50 2,029.59 -61.30 1,711.19 4,889.68 -65.00
Attached Table 5, China Cotton Import Volume by Mode, February 2010

Unit: MT
Total 221,026 93,072 137.48 522,365 171,048 205.39
General Trade 89,816 37,388 140.23 186,649 69,377 169.03
Bonded Area Transit 60,088 20,264 196.52 148,847 41,183 261.43
Processing with Imported Material 46,689 25,332 84.30 104,513 45,975 127.32
Bonded Warehouse Entry and Exit 22,949 9,929 131.13 80,262 14,080 470.04
Processing with Customer's Material 1,483 159 835.29 2,095 433 384.34
Attached Table 6, China Yarn Production by Province, February 2010

Unit: 000MT
Total 1,628.6 1,503.6 8.3 3,582.1 2,868.4 24.9
Shandong 456.2 453.2 0.7 947.7 848.4 11.7
Jiangsu 275.6 280.5 -1.7 671.5 527.5 27.3
Henan 249.2 194.1 28.4 534.1 390.3 36.8
Zhejiang 131.3 110.8 18.5 297.0 194.8 52.5
Fujian 108.3 90.4 19.8 235.1 179.7 30.8
Hubei 105.7 94.0 12.4 221.1 183.5 20.5
Page 13 of 22
Sichuan 46.6 34.6 34.7 98.4 64.9 51.6

Hebei 41.9 48.4 -13.4 104.4 96.7 8.0
Jiangxi 41.2 28.5 44.6 95.5 63.8 49.7
Hunan 38.0 38.6 -1.6 88.1 72.7 21.2
Anhui 32.3 31.1 3.9 61.8 56.7 9.0
Guangdong 24.9 26.6 -6.4 50.7 46.6 8.8
Xinjiang 23.9 18.8 27.1 52.3 38.6 35.5
Shaanxi 14.8 14.0 5.7 35.1 27.6 27.2
Liaoning 8.9 12.8 -30.5 20.2 23.1 -12.6
Chongqing 8.5 5.4 57.4 19.3 10.8 78.7
Guangxi 6.5 6.1 6.6 14.6 11.3 29.2
Shanghai 2.9 3.2 -9.4 8.1 6.6 22.7
Jilin 2.8 2.4 16.7 6.6 5.2 26.9
Inner Mongolia 2.7 1.0 170.0 3.8 2.2 72.7
Tianjin 2.2 2.8 -21.4 5.4 6.4 -15.6
Shanxi 1.7 2.8 -39.3 5.0 4.5 11.1
Heilongjiang 1.1 1.3 -15.4 2.3 2.3 0.0
Guizhou 0.7 1.0 -30.0 1.9 1.9 0.0
Yunnan 0.3 0.2 50.0 0.7 0.7 0.0
Beijing 0.2 0.4 -50.0 0.5 0.8 -37.5
Qinghai 0.2 0.3 -33.3 0.5 0.3 66.7
Gansu 0.1 0.3 -66.7 0.4 0.5 -20.0
Attached Table 7, China Textile and Apparel Export Value by Month, 2009～2010
Unit: million US$
Textile and Apparel Export YOY(±%) Textile Export YOY(±%) Apparel Export YOY(±%)
200901 15,231 -0.68 4,724 -12.40 10,507 5.68
200902 6,675 -35.12 2,563 -32.45 4,112 -36.69
200903 12,164 2.85 4,732 -6.49 7,432 9.84
200904 12,493 -12.55 5,121 -14.40 7,372 -11.22
200905 12,306 -14.75 4,895 -16.27 7,411 -13.71
200906 13,948 -9.96 4,911 -12.59 9,037 -8.46
200907 16,373 -12.37 5,323 -13.54 11,050 -11.80
200908 15,696 -15.57 5,162 -14.70 10,534 -16.00
200909 16,752 -6.98 5,670 -4.69 11,081 -8.12
200910 14,651 -12.51 5,294 -4.78 9,357 -16.35
200911 13,959 -9.53 5,366 7.42 8,593 -17.64
200912 16,787 4.49 6,216 25.10 10,571 -4.75
201001 15,568 2.21 5,581 18.15 9,986 -4.95
201002 12,638 89.34 4,567 78.19 8,071 96.29
Page 14 of 22
Attached Table 8, China Cotton Supply and Demand, 2005/06～2009/10

Unit: 000MT
2005/06 2006/07 2007/08 2008/09 2009/10
Beginning Stocks 3,190 3,991 3,608 3,239 3,445
Production 5,714 7,756 8,024 7,992 6,500
Domestic supply 8,904 11,747 11,631 11,231 9,945
Imports 4,201 2,306 2,511 1,523 2,000
Total supply 13,105 14,053 14,142 12,754 11,945
Domestic Consumption 9,106 10,426 10,890 9,290 9,896
Exports 8 19 14 19 10
Total Consumption 9,114 10,445 10,904 9,309 9,906
Ending Stocks 3,991 3,608 3,239 3,445 2,039
Stocks/Use Ratio 43.8 34.5 29.7 37.0 20.6
Date of Forecast: March 2010; Season Beginning August 1
Attached Table 9, Global Cotton Supply and Demand, 2005/06～2009/10

Unit: 000MT
2005/06 2006/07 2007/08 2008/09 Feb Mar
2009/10 2009/10
Production 25,407 26,552 26,107 23,395 22,370 22,261
Domestic Consumption 25,404 26,937 26,773 23,973 25,154 25,191
Imports 9,747 8,286 8,490 6,545 7,351 7,487
Exports 9,710 8,114 8,376 6,582 7,353 7,468
Ending Stocks 13,580 13,746 13,642 13,590 11,339 11,192
Resources: USDA, March 2010. Season Beginning August 1
Attached Table 10, Global Cotton Supply and Demand, 2005/06～2010/11

Unit: 000MT
2005/06 2006/07 2007/08 2008/09 Feb Mar Feb Mar
2009/10 2009/10 2010/11 2010/11
Beginning Stocks 11,611 12,271 12,601 12,029 12,280 12,330 10,530 10,460
Production 25,646 26,766 26,037 23,413 22,180 22,220 24,120 24,370
Domestic Consumption 24,985 26,434 26,484 23,282 23,930 24,090 24,530 24,760
Imports 9,613 8,187 8,392 6,606 7,130 7,300 7,350 7,540
Exports 9,737 8,103 8,361 6,562 7,130 7,300 7,350 7,540
Ending Stocks 12,271 12,601 12,029 12,281 10,530 10,460 10,110 10,070
Cotlook A Index 56.1 59.1 72.9 61.2 72.0 74.0
Resources: ICAC, March 2010. Season Beginning August 1
Page 15 of 22
Attached Figures
Attached Fig. 1, China Uncombed Cotton Import Volume by Month, 2006-2010
Unit:M T
600,000
500,000
400,000
300,000
200,000
100,000
-
Jan Feb M ar Apr M ay Jun Jul Aug Sep Oct Nov Dec
2006 2007 2008 2009 2010
Attached Fig. 2, China Uncombed Cotton Import Price (CIF)
单位：美元/吨
1,800
1,700
1,600
1,500
1,400
1,300
1,200
1,100
1,000
2005/02
2005/05
2005/08
2005/11
2006/02
2006/05
2006/08
2006/11
2007/02
2007/05
2007/08
2007/11
2008/02
2008/05
2008/08
2008/11
2009/02
2009/05
2009/08
2009/11
2010/02
Page 16 of 22
Attached Fig. 3, China Uncombed Cotton Imports by Original Country, February 2010
M alawi
Brazil 1.2%
2.0% Others
Pakistan
Australia 7.4%
1.2%
Cameroon 1.4%
Burkina Faso 2.3%
2.6% India
43.0%
Uzbekstan
12.3%
United States
26.6%
Attached Fig. 4, China Uncombed Cotton Imports by Province, February 2010
Tianjin Others
Beijing Hebei Hubei 2.6% 4.1%
2.8% 2.7% 2.7%
Guangdong Shandong
2.9% 39.2%
Zhejiang
4.2%
Xinjiang
4.8%
Shanghai
13.5%
Jiangsu
20.5%
Page 17 of 22
Attached Fig. 5, China Uncombed Cotton Imports by Customs, 2008~2010
Uint: M T
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
08/01
08/02
08/03
08/04
08/05
08/06
08/07
08/08
08/09
08/10
08/11
08/12
09/01
09/02
09/03
09/04
09/05
09/06
09/07
09/08
09/09
09/10
09/11
09/12
10/01
10/02
Qingdao Shanghai Nanjing Tianjin Urumqi Others
Attached Fig. 6, China Uncombed Cotton Imports by Mode, February 2010
Processing with
Bonded Warehouse Entry
Customer's M aterial
and Exit
0.7%
10.4% General Trade
40.6%
Processing with Imported
M aterial
21.1%
Bonded Area Transit

27.2%
Page 18 of 22
Attached Fig. 7, China Yarn Production by Month, 2007-2010

Unit: 000 M T
2,500
2,000
1,500
1,000
500
0
1月 2月 3月 4月 5月 6月 7月 8月 9月 10月 11月 12月
2007 2008 2009 2010
Attached Fig. 8, Yarn Production of Major Producing Regions, February 2010
000 M T %
500 50
450
40
400
350 30
300 20
250
200 10
150 0
100
-10
50
0 -20
Jiangxi
Shandong
Guangdong
Jiangsu
Sichuan
Hubei
Hebei
Anhui
Henan
Zhejiang
Fujian
Hunan
This M onth YOY(± ％)
Page 19 of 22
Attached Fig. 9, Yarn Production of Major Producing Regions, Jan-Feb. 2010
000 M T %
1,000 60
900
50
800
700
40
600
500 30
400
20
300
200
10
100
0 0
Jiangxi
Shandong
Guangdong
Jiangsu
Sichuan
Xinjiang
Hubei
Hebei
Anhui
Henan
Fujian
Hunan
Zhejiang
Jan.-Feb., 2010 YOY(±%)
Attached Fig. 10, China Cotton Cloth Production by Month, 2007-2010
Unit: 00 million meter
35
30
25
20
15
10
0
2007 2008 2009 2010
Page 20 of 22
Attached Fig. 11, China Cotton Cloth Export Volume by Month, 2007-2010
Unit: million meter
800
700
600
500
400
300
200
100
0
2007 2008 2009 2010
Attached Fig. 12, China Textile and Apparel Export Value, 2006-2010
million US$ %
20,000 100
18,000 80
16,000
60
14,000
12,000 40
10,000 20
8,000 0
6,000
-20
4,000
2,000 -40
0 -60
2006.02
2006.04
2006.06
2006.08
2006.10
2006.12
2007.02
2007.04
2007.06
2007.08
2007.10
2007.12
2008.02
2008.04
2008.06
2008.08
2008.10
2008.12
2009.02
2009.04
2009.06
2009.08
2009.10
2009.12
2010.02
Export Value YOY(±%)
Page 21 of 22
Attached Fig. 13, Cotton Prices in CNCE, ZCE and ICE, 2008-2010
RM B yuan/M T USC/lb
18,000 90
17,000
80
16,000
70
15,000
14,000 60
13,000
50
12,000
40
11,000
10,000 30
2008-03-11
2008-04-09
2008-05-09
2008-06-06
2008-07-07
2008-08-06
2008-09-03
2008-10-09
2008-11-06
2008-12-04
2009-01-05
2009-02-09
2009-03-09
2009-04-07
2009-05-06
2009-06-05
2009-07-03
2009-07-31
2009-08-28
2009-09-25
2009-11-02
2009-11-30
2009-12-28
2010-01-26
2010-02-26
2010-03-26
CNCE nearby ZCE nearby ICE nearby
Attached Fig. 14, Exchange Rate USD to RMB of Imports & Exports
6.8500
6.8450
6.8400
6.8350
6.8300
6.8262
6.8250
6.8200
200810 200812 200902 200904 200906 200908 200910 200912 201002 201004
Page 22 of 22

China Monthly Cotton Report

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China Monthly Cotton Report

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Beijing Shennong Kexin Agribusiness Consulting Co.

China Monthly Cotton Market Report

I. Cotton Market in March ..................................................................................................... 3

I. Cotton Market in March

Average prices of 32S cotton yarn was RMB22,428/MT in March, an increase of

Processing Profit Cncotton B(328)

II. Cotton Market Information in March

1 Domestic Cotton Supply in 2009/2010 Tends to Tight

2 The Cotton Growing Areas in 2010 is Hard to Recover

2.1 Long Growing Period and Working Days

Table 1 Labor Days Comparison of Wheat, Corn, Rice and Cotton

2.2 Low Level of Mechanization and Labor Intensive

2.3 Policies Favors Grains than Cotton

Figure 2, Long-Staple Cotton Price

4 Prices of Cotton Yarn Will Continue to Increase

III. Cotton Growing Situation and Forecast in March

Growing Areas in 2010 is Hoped to Remain the Same as Last Year

IV. Analysis of Cotton Import in February

1 Cotton Imports Record 221,000 MT, Up 2.86 Times

3. Xinjiang Increases 741.8% from Last Month in Imports

4 Imports at Urumqi Customs Increased 2% from Previous Month

5 General Trade Became the Major Import Trade Mode

V. Analysis of Economic Situation of Textile Industry in February

2 Yarn Production in Jiangxi and Sichuan Increase Significantly

3 Cotton Cloth Production Rises 37.91%

the output in March will increase significantly.

4 Cotton Cloth Exports Increases 58.25% Year-on-Year

5. Textile and Apparel Exports Dropped by 18.8%

VI. Analysis of Cotton Supply and Demand

1 Forecast Increase in Consumption and Imports in 2009/10

In March, BSNABC adjusts the forecast of cotton consumption in 20096/10 up to 9.896

Attached Table 1, China’s Cotton Production Forecast, 2009

Senegal 1,304.89 - 2,460.63 -

Attached Table 5, China Cotton Import Volume by Mode, February 2010

Attached Table 6, China Yarn Production by Province, February 2010

Sichuan 46.6 34.6 34.7 98.4 64.9 51.6

Attached Table 8, China Cotton Supply and Demand, 2005/06～2009/10

Attached Table 9, Global Cotton Supply and Demand, 2005/06～2009/10

Attached Table 10, Global Cotton Supply and Demand, 2005/06～2010/11

Attached Fig. 1, China Uncombed Cotton Import Volume by Month, 2006-2010

2006 2007 2008 2009 2010

Attached Fig. 2, China Uncombed Cotton Import Price (CIF)

Attached Fig. 4, China Uncombed Cotton Imports by Province, February 2010

Attached Fig. 5, China Uncombed Cotton Imports by Customs, 2008~2010

Attached Fig. 6, China Uncombed Cotton Imports by Mode, February 2010

Bonded Area Transit

Attached Fig. 7, China Yarn Production by Month, 2007-2010

2007 2008 2009 2010

Attached Fig. 8, Yarn Production of Major Producing Regions, February 2010

This M onth YOY(± ％)

Attached Fig. 9, Yarn Production of Major Producing Regions, Jan-Feb. 2010

Jan.-Feb., 2010 YOY(±%)

Attached Fig. 10, China Cotton Cloth Production by Month, 2007-2010

Unit: 00 million meter

Export Value YOY(±%)

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