Home / Knowledge / News / Textiles / Hike in Chinese yarn import boosts world mill cotton use
Hike in Chinese yarn import boosts world mill cotton use
Jul '14
China’s price support program, introduced in 2011/12, raised internal market prices for cotton substantially above world prices.

Consequently, yarn, fabric, textiles, and apparel made from domestic cotton became less competitive compared to similar products containing man-made fibers or cotton from outside of China. As a result, mill use in China has fallen, while outside of China it has grown.

Much of the decline in Chinese mill use can be attributed to larger imports of lower priced cotton yarn, which has supported mill use around the world. That stronger yarn import demand in China is roughly equal to the total growth in mill use outside of China.

The major beneficiaries of this increased demand have been India, Pakistan, and Vietnam, but even the United Sates has seen yarn exports to China more than double, albeit from a very small base.

Moving into 2014/15, as China shifts from a price support to a target price system, the full effect on yarn imports is not yet clear.

For the first time since the introduction of the price support program, USDA forecasts mill use in China growing faster than the rest of the world. In Vietnam, where mill use nearly doubled since China implemented the price support policy, USDA is forecasting a slight decline.

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