China's new cotton policy for 2014 will reduce price fluctuation of cotton, is favorable for stabilizing planting area and supply, industry analyst says

BEIJING , April 14, 2014 () – China's new cotton policy for this year will reduce price fluctuation of cotton and is favorable for stabilizing planting area and supply, the China Securities Journal reported, quoting an analyst with the Galaxy Futures as saying.

The target price policy replaced the prior stockpiling policy and would bypass the processing sector to give subsidies directly to farmers. The move will significantly lower distribution cost on the cotton market and thus cut raw materials cost for textile enterprises.

As the new policy will help stabilize supply and reduce distribution cost, it is likely negative for cotton prices in the long run, analysts noted. (Edited by Liu Xiaoyun, liuxy08@xinhua.org)

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