China is abandoning a stockpiling program that has led to an outsized hoard of cotton it is forced to sell at a loss, the Wall Street Journal reported Monday. Instead, it will switch to a subsidy system for cotton farmers this year. Beijing’s efforts to use the state reserves system to maintain cotton harvest and ensure a stable supply of raw materials for textile mills has backfired, the report said. Higher prices meant that cotton flowed to state reserves – estimated at half of world cotton stock – while denying mills the supply they needed. The No. 1 central document, which typically lays out priorities for the agricultural sector, called for a price subsidy trial for cotton grown in Xinjiang, where it is a major product of the quasi-military Xinjiang Production and Construction Corps, and for soyabeans grown in northeast China, home to most of the nation’s soya grown for human consumption, the report said.
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