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With China's cotton market shortfall expected to reach 4 million tons this year, thousands of textile producers are under pressure from rising costs and insufficient supplies of raw cotton materials.

Chen Junliang, chairman of the Jiangsu Cotton & Fiber Group in east China's Jiangsu Province said that textile producers have been scrambling for cotton purchase quotas, which are usually inclined to big companies.

Du Min, a research fellow with the Rural Economic Research Center under the Ministry of Agriculture said that traditional cotton growing areas in the east China region went down dramatically. The demand-supply gap has been widening in the past six years.

Statistics with the China Textile Association suggested that China's cotton growing area measured 5.12 million ha. in 2005, down 10 percent from the previous year. The total cotton yield amounted to 5.76 million tons last year.

According to experts with the Rural Economic Research Center, the domestic demand for cotton has been growing at 10 percent since 1999, while cotton plantation areas have dropped by 14.2 percent to 4.59 million ha. in 2004.

The country imported 3 billion U.S. dollars of cotton in 2004, accounting for one fourth of the world's total cotton import trade. Unlike America, China's cotton industry, the livelihood of some 100 to 150 million Chinese rural population, is not subsidized by the government.