China: Cotton and Products Update
As China continues to hold over half the world’s cotton in reserved stocks, China’s MY15/16 cotton imports are forecast to plummet to 1.25 million tons from the 1.8 million tons in the previous year. This is the lowest level of imports since China joined the World Trade Organization in 2001. The import plunge is mainly due to China’s limited issuance of additional import quotas (TRQ) driving the Chinese industry to use imported cotton yarn. MY15/16 cotton production is forecast to hit record low at 5.3 million tons since MY05/06 due to 21 percent fall in planted area in response to the lower government’s price support for cotton planting. The forecast MY15/16 for cotton use remains unchanged from the previous year at 7.4 million tons. Meanwhile, China’s growing demand for yarn continues to encourage yarn imports.
