NDRC allots imported cotton quotas for next year

21 Sep '05

2 min read

In a major decision, the National Development and Reform Commission has decided to allocate import quotas of cotton to the tune of 894,000 tons as the first load, for next year.

As per commitment to WTO, China has agreed to raise import quotas beginning 2004, to 5 percent of China's total output in 2003 (from less than 3 per cent in 2001).

Of the total imports China has allotted 34 percent to state-owned businesses.

According to China Cotton Association sources, the quotas allocation to enterprises will be completed this year-end. Private enterprises will have to apply for the quotas by several means, including general trade and barter, the National Development and Reform Commission informed on its website.

Sources further added that depending on the demand and supply, and prices prevailing, additional quotas might be released for next year.

China may face a huge gap of 3 million tons between the domestic production and demand in the coming year.

Even though the EU-China textile row has been solved, and Sino-US trade issues yet to be resolved, total demand is expected to rise.

Cotton output is further affected due to shrinking cotton cultivation areas between 10 to 13 percent this year from 2004.

Weather is another factor that will play an important part during the harvesting season.

Market sources says cotton prices will remain fairly stable in the near future, he said, as the sliding duty China implemented on cotton imports would press the prices at around 12,000 Yuan (US$1,480) per ton.

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