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Circular of Ministry of Commerce, State Development and Reform Commission and State Administration for Industry and Commerce on regulating the autumn cocoon production and purchase works this year has been promulgated on Sept. 6, 2005 and made it public on Sept. 13, 2005.

All competent commercial administrations of provinces, autonomous regions, municipalities, development and reform commission, price bureaus and industry and commercial bureaus:

The spring cocoon production and purchasing situation is better than last year with stable purchase order, high quality and output and sharply increased interest from breeding silkworms, thus stimulating sericulture farmers’ enthusiasm in cocoon growing. It is predicted the autumn cocoon production shall remain uptrend. For the purpose of regulating the autumn cocoon production and purchase works this year, the issues for the autumn cocoon production and purchase are informed as follows:

1.Enhance information leadership and transmission and arrange production scope reasonably linked to market consumption demand to promote the silk sector develop healthily and stably.

The hiked cocoon and silk prices in the first half of this year should contribute to increasing demand from stable exports, structure adjustment beneficial from trading conflicts, natural disaster after the spring crops in South China and the prediction for summer and autumn cocoon production.

The extremely rising prices, especially the raw silk price that exceeded 200000 yuan per ton recently, will inevitably curb consumption and lead to market risk. Furthermore, if too hot production expansion is invited, it is unbeneficial to healthy development for silk sector.

Under such circumstances, local governments should enhance the information leadership, arrange production scope reasonably linked to market consumption demand and avoid disturbing autumn cocoon production and purchase; should guide farmers and enterprises to understand current cocoon and silk supply and demand situation correctly to avoid farmers’ blind enthusiasm stimulated in cocoon growing, curbing back-processes production and silk consumption and breaking the balanced market status, and should remind enterprises and sericulture farmers to observer market movement calmly for making decisions on production and trading cautiously.

On the other hand, local cocoon and silk administration sectors should not seek the quantity expansion results, however, should emphasize on setting silkworm seed volume reasonably, provide sericulture farmers high quality mulberry and silkworm varieties and relative service assistance and popularize modern technology to ensure silk industry develop healthily and stably.

2.Enhance the regions’ exchanges to set cocoon purchase price policy reasonably.

Local cocoon purchase price level should be established in accordance with the principles of protecting farmers’ economic interest, consolidating the sericulture base, promoting supply and demand balance and healthy development for cocoon and silk sector, avoiding market risks and extreme fluctuations.

3.Enhance the cocoon production and purchase management.
(1)Implement the qualification entry system strictly;
(2)Enhance the examination and supervision of the implementation of the purchase measures.
(3)Paying sericulture farmers when selling cocoons.

(The circular published in this webpage is an abstract and authentic in Chinese.)