Observations from Xinjiang: Cotton Cost Structure in Western China

Cotton is a key agronomic crop in many regions of the world and a key consumable commodity worldwide. Policy changes in key cotton producing areas and the adoption of various new technologies has shifted cotton acreage within and between cotton producing countries. Since the mid-2000’s the Xinjiang province of China has become the largest cotton producing area in China, producing nearly 70 percent of the country’s cotton. China is currently the second largest cotton producing country. This study 1) reviews surveyed cost of production data from Xinjiang, China, 2) compares this data to cost of production data from three semi-arid regions of the U.S., and 3) provides commentary on the global competitiveness of Xinjiang produced cotton. From 2010 through 2014, total cost of cotton production in Xinjiang has increased 56 percent, led by machinery costs (lease+repairs+depreciation) (124 percent), employee labor (77 percent), insurance (974 percent) and fertilizer (48 percent).