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Industry And Cluster | News & Insights

Cotton imports into China have reached a seven-year high, according to the USDA

Published: June 15, 2021
Author: Manali bhanushali

Cotton imports to China are expected to reach a seven-year high in 2020/21, owing to the greatest predicted consumption in three years, substantial State Reserve (SR) imports, and favorable prices for imported cotton relative to domestic supply. China’s imports in 2021/22 are expected to be lower than the previous year, as State Reserve demand is expected to dip from the high levels seen thus far in 2020/20.

Due to strong demand for cotton yarn and much smaller yarn inventories, spinners’ spot margins are around 30% greater than the previous year. Strong China demand is further bolstered by the largest SR imports in seven years.

Domestic cotton SR purchases were reported to be zero for the December 2020 to March 2021 programme, therefore recent imports are expected to refill SR supply.

Import prices that were favourable also played an impact. In May 2021, a “landed” A-Index pricing (1 percent in-quota tariff plus 9 percent VAT) was 12 cents more than China’s commonly used domestic price index (CC3128B). When compared to the same period last year, this represents an increase of more than ten cents.

Image Source: Flower photo created by Racool_studio – www.freepik.com

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