If prices fall, China may import more cotton this season

22 Nov '11

2 min read

Despite an anticipated bumper cotton harvest, China may import 800,000 tons cotton in the ongoing new cotton season. However, China is unlikely to purchase cotton in large volumes in the short term.

Industry analysts say that, if overseas cotton price falls further, China is likely to import 700,000-800,000 tons of cotton for its reserves in 2011/2012.

Analysts and traders say that current inventory of China National Cotton Reserves Corporation (CNCRC) is estimated at about 1 million tons, well below 2-3 million tons, the level needed to stabilize domestic cotton price.

The Chinese government will be quite cautious towards cotton imports on a large scale, due to downstream demand being still in the doldrums.

China is the world's largest cotton producer, its annual output is 6-7.5 million tons as well as the country is also the world's largest cotton consumer and importer.

The US Department of Agriculture (USDA) said last week that, China imported 996,100 bales of US cotton last week, which was China's largest weekly import volume of US cotton in eight years.

Analysts expect China's cotton acreage will reduce 10 percent next year, as cotton farmers will be more cautious in face of ups and downs in cotton price. China's domestic cotton price hit a record high in February, but the price has dropped 40 percent since then.

According to a report released by the China Cotton Network, China's total cotton imports reached 2.2 million tons in the first ten months of 2011, down 2.4 percent year on year.

Fibre2fashion News Desk - China

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