Cotton demand may slip as textile restrictions askew exports

16 Sep '05

2 min read

On going textile friction between China and US, and the recently resolved issue of import quotas with European Union has impacted on the demand for cotton in China on the lower side, industry sources reveal.

Already textile exports from China have been badly hit, what with EU having released 87 million pieces of garments, textiles that were blocked at European ports having exceeded the predetermined levels of imports from China.

But more important are the restricition on 10 textile categories from the US that stifles the export growth of the Chinese textiles sector, and more in the pipeline.

China has over 18 million people employed in the textiles sector and had anticipated huge jump in exports since the expiry of textile quotas begining this year.

The government is yet to announce quotas for 300,000 tonnes after handing out in April extra quotas of 700,000 tonnes which is over and above the 2005 quotas of 894,000 tonnes.

China is currently top importer of US cotton, and imports for 2005/2006 are forecast to reach 3.2 million tonnes. All this despite China being the largest exporter of textiles when its own cotton output is reportedly shrinking.

Chinese cotton consumption is reportedly growing at about 10 percent from a year earlier, to 8.9 million tonnes in 2005/2006.

China's domestic cotton output is expected to go down 5.7 million tonnes from a record 6.32 million tonnes last year, on account of smaller acreages.

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