China looking at buying cotton from the United States; India becoming prime exporter of cotton to China
In anticipation of a positive trade deal between China and the United States, there is signal that the United States may export cotton to China. With the ginning process completed this week in the High Plains of Texas, it is hoped that the High Plains’ cotton production will cross the 4 million bales mark. Somewhere about half to three-quarters of a million in the United States, which is comparatively high, given the volume of cotton left to sell.
With the 25% tariff, China’s buying is certainly hampered and the future buying in volumes depends on a favourable trade deal, that needs to be sorted out. China normally goes for high-quality cotton, however, it’s interested in lower grades (31 and 41 colour grade) at a discounted price. The trade deal will enable to push these kinds of cotton into the China market.
The United States, the world’s biggest exporter of the fibre, has cornered the bulk of Chinese imports for at least a decade. But China’s decision to impose a 25 percent import tax on cotton, in retaliation for tariffs enacted by the administration of U.S. President Donald Trump, has allowed India to grab a bigger share of the Chinese market.
The Indian traders have signed contracts to ship 800,000 bales of cotton to China. The cotton was sold at around 80 to 81 cents per pound on a cost and freight basis (C&F) to China, for shipments in March and April. India has already shipped around 600,000 bales to China so far in the 2018/19 marketing year that started on 1Oct, 2019.
Cotton ending stocks in China are forecast at 6.58 million tonnes in 2018/19, down from 7.43 million tonnes. The country has also been buying cotton from Brazil in the last few days due to depleting stocks.
China India News Textile Value Chain Uncategorized US