China to crack down illegal cotton purchase

China's market watchdog has planned to tighten control of the cotton market to crack down illegal cotton dealers.

A notice issued by the State Administration of Industry and Commerce came after a number of companies conducted illegal purchase and processing without registration with local authorities.

To secure the interests of cotton planters, the Chinese government has previously required all cotton dealers to acquire licenses first.

China is the largest cotton producer in the world, which turns out more than six million tons of cotton a year. But the low purchase prices have made growers suffer a lot.

The restriction came out lately after a temporary management method on cotton processing and purchasing was introduced, which allowed any enterprise or individual to enter the business if they register first with industrial and commercial authorities.

The administration urged its local departments to launch a special campaign to stop illegal practices and close down illegitimate cotton mills.

It warned that illegal middle dealers, who sell fake and shoddy cotton must be punished severely while disqualified processors must stop production so as to rectify the market order.

Chinese banks have long been providing low-interest loans to cotton dealers to make sure cotton growers could get a good pay from cotton plantation.

China's Agricultural Development Bank has so far extended credit aggregate of 11 billion yuan to 152 eligible purchasing enterprises in Xinjiang, 13 more than last year. .

Source: Xinhua