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China not to increase cotton imports
10
Mar '11
China has decided not to increase import of some important agricultural products and cotton in particular. It was expected that China would increase cotton import for price stability in world agricultural market but China has decided not to oblige.

On March 7, China's Minister of Commerce Chen Deming told that China had no intention to increase import of some important agricultural products and cotton in particular, just to protect price stability of world agricultural market.

Recently, prices of most varieties of cotton import have exceeded 40,000 Yuan per ton because of continuous price rise in domestic and international markets. Chinese cotton price index hit 31,005 Yuan / ton on March 7, up 92 Yuan / ton.

In China, cotton prices have been showing upward trend since last year and broke 20,000 Yuan mark in September last year. The main reason for rise in international cotton prices is big gap between cotton production and demand.

At present, in China alone, the gap between production and demand is more than four million tons. Because of this big gap, Chinese companies are dependent on import. But it is difficult for companies to import at current price level of 30,000 to 40,000 Yuan per ton.

So they are not in hurry to import. They have adopted wait and watch policy as domestic cotton prices are expected to fall, when new cotton arrives in the market within few months. With new arrivals, import prices will also come down.

In fact, China has substantially increased cotton imports in recent years. As per available data, China's cotton imports were 4.2 million tons in 2005/06, the highest in recent years while world cotton trade was 9.8 million tons.

It was 4.10 million tons in 2009/10 and 3.80 million tons in 2010/11 while world trade was 7.70 million tons in 2009/10 and 8 million tons in 2010/11. Thus China's cotton imports accounted for nearly half of the global trade in recent years.

China's cotton import quotas in 2011 have been issued to enterprises which include 894,000 tons of import tariff quota and 1.7 million tons of sliding tax quotas. So China has officially increased import 700,000 tons more than last year. Besides import quotas, local enterprises import on their own.

Fibre2fashion News Desk - China

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