The market widely expects that China's cotton import quotas in 2011 will be increased at least by two million tons, which is three times of the current official import quota.
The Government will dramatically increase import quotas in order to ensure adequate supply of the raw material.
Cotton import quotas in 2011 are expected to rise from 894,000 tons to 2.7 million tons. Supply shortages caused by recent climatic reasons have driven cotton prices sharply higher.
China controls cotton imports through tariff quotas and additional import quotas based on floating tariff every year. Imports within tariff quotas attract one percent tariff.
Rapid increase in cotton prices added inflationary pressures, prompting the government to approve extra cotton imports of 1.8 million tons in May.
Industry analysts say demand remains strong, China is expected to approve the same quantity of import quotas or even more quantity next year. They expect that total cotton import quotas will reach 2.8 million tons in 2011.
The Ministry of Finance said on Tuesday that China would continue to implement floating tariff on certain quantity of cotton imports outside tariff quotas, the rate will remain unchanged.
The Government had earlier said in September of this year that, official cotton import quotas would remain at 894,000 tons next year too.
Fibre2fashion News Desk - China
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