• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

The cotton market since China opened their market to the world.

Extracts from this document...


When China opened their market to the world, prices of cotton fluctuated. This was caused by various factors. Firstly, since 1999 the Chinese government has allowed the farmers to sell part of their crop at prices they wanted and that they "no longer have the certainty of guaranteed purchases by the state". Therefore numerous investors have surged into the textile manufacturing market. This would lead to an increase in the price of cotton as the demand in the textile industry would increase rapidly. Demand1is the quantity of goods or services that will be bought at any given price over a period of time. With the increase in demand, the curve would shift to the right. A shift in the demand curve2 means a movement of the whole curve to the right or left of the original caused by a change in any variable affecting demand except the price. ...read more.


First, the farmers "expand their cotton acreage" rapidly to cope with the huge increase in the demand for cotton. Therefore because of the large increase in supply, the price of cotton increased. Supply3 is the quantity of goods that sellers are prepared to sell at any given price over a period of time. With the increase in supply, the supply curve would shift to the right from S to S1, therefore the price decrease from P to P1 and quantity shoots up from Q to Q1. It is shown in diagram 2. Diagram 2: Increase in supply for cotton Price S S1 D Quantity Secondly, the price of cotton has decreased because of China's government policies. The first policy is "government has expanded its cotton import quotas" and this would cause the supply in China to increase as the government has increased the amount of cotton that is allowed enter China. ...read more.


From this article, we have seen two aspects of demand theory. The increase in demand is because of two main reasons which lead to the increase in price of cotton; and the fall in demand is due to the curbing of bank loans which lead to the fall in price. Therefore, the demand theory has demonstrated the two possible outcomes. The supply theory is not as good as it only shows one aspect of the theory. The decrease in supply has caused the price of cotton to increase. However, it does not show that increase in supply will cause the price of cotton to fall. Hence, this article has not shown the entire supply theory. Nevertheless, I feel that this theory have evidently helped to illustrate the rise and fall of the price of cotton. 1 Alain Anderston, Economics, third edition,2000.Unit 4,pg 23 2 Alain Anderston ,Economics, third edition,2000. Unit 4, pg 27 3 Alain Anderston ,Economics, third edition,2000.Unit 5 ,pg 34 4 Alain Anderston ,Economics, third edition,2000.Unit 40, pg 264 ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Marketing & Research section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Marketing & Research essays


    in the application form what is involved in the job that he/she has. Another example is that if an employee has been asked to do a job that is dangerous then this problem could be resolved first of all by just talking to the person that asked the employee to

  2. business planning unit 8

    Galaxo has to keep a certain increase in price if the inflation rate goes up. Moreover, if there is high unemployment then this will result in less people with money to be able to buy products such as Galaxo.

  1. Applied Business Studies

    It will also give me a basic idea of how they will work on a day to day basis. I cannot expect my future employees to understand everything in my business, and understand what to do in case of an emergency and how to work on the tills and with

  2. Unit 2 Investigating business

    The next thing that they offer is information on different qualifications that you should look for in staff that you are hiring to do administrative jobs for you: * "Diploma in Computerised Book-keeping, for those who have gained a qualification in manual book-keeping * IAB levels 2 and 3 Certificates

  1. applied business unit 3 coursework

    As the 4th round is an away game there will not be a chance for the business to sell flags on this match day but we can always sell them the game before the match and promote the flags so that the fans will want to take a Flikaflag away with them to the Away FA cup game at Coventry.

  2. Business Enterprise unit 5

    always strives to achieve the very best in whatever I do, all these skills are necessary to for my business venture. In addition I can work as part of a team and individually. I am also a flexible person, have great patience, I am an outgoing confident person, I am

  1. Marketing report - Swatch watches in China

    in China. Its huge potential market will increase the sales of Swatch significantly, making China the most dynamic marketplace in the world for Swatch. * Positioning: Today, the Swatch Group offers watches in all price categories, Such as Breguet, Blancpain, Glash�tte-Original, L�on Hatot, Jaquet-Droz, Omega and Tiffany & Co.

  2. This is a report on the international dimension of Costa Coffee and Coffee Aroma.

    Market share, in strategic management and marketing is, according to Carlton O'Neal, the percentage or proportion of the total available market or market segment that is being serviced by a company. It can be expressed as a company's sales revenue (from that market)

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work