CHINA’S production of top quality cotton, known as extra-long staple (ELS) cotton, could be three times last year’s crop in 2015/16, traders estimate, pressuring prices and demand from global exporters like the United States.

    ELS cotton, also known as pima, makes up a tiny portion of total cotton consumption. It is mainly used by luxury shirt brands and in high-end bed sheets.

    Chinese mills consume most of the fiber but local output declined under a government stockpiling policy that paid generous prices to farmers for regular cotton and offered no incentives to growers of higher-quality ELS.

    After the government abandoned stockpiling last year and offered new subsidies connected to market prices, farmers began to plant significantly more ELS. The government’s subsidy for the fiber is 1.3 times the regular cotton subsidy.(SD-Agencies)