资讯 1 10 英文网 294 lunbotu 605425 Why does China’s cotton imports fall sharply in 2021/22? 2022-09-27 15:56:26 shenhe
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Why does China’s cotton imports fall sharply in 2021/22?
2022-09-27

Customs statistics show that China imported about 110,000 tons of cotton in August 2022, a year-on-year increase of about 24.9%, showing an increase market, but in 2021/22 (September 2021 to August 2022), China imported about 1.74 million tons of cotton, decreasing by 1 million tons from the previous year, a year-on-year decrease of about 36.5%, which is rather a sharp decline. 

 

Specifically, the import volume of 2021/22 Brazilian cotton, Indian cotton and American cotton has fallen significantly year-on-year. Since March 2022, the monthly import volume of Brazilian cotton has shown a “cliff-like” decline, the proportion accounting for China’s cotton import volume in that month fell below 10% and 5%; while the performance of Indian cotton imports was even worse. From May to August 2022, Indian cotton was almost removed from the “shopping cart” by Chinese buyers, accounting for only about 1% of China’s total imports that month. 

 

According to analysis from insiders, The reasons for the sharp drop in China’s total cotton imports in 2021/22 mainly includes the following points: 

 

First, since the first half of 2022, due to the repeated domestic epidemics, a large number of textile and apparel orders flow to the Southeast Asian countries, and the US government’s comprehensive escalation of the import ban in Xinjiang cotton, the number of new export orders received by domestic enterprises has been greatly reduced (including traceability orders). 

 

Second, since the first half of 2022, affected by the surge in ICE, the import cost of foreign cotton under the 1% tariff (or the sliding scale duty) has been seriously inverted with the price of Xinjiang cotton in the inland warehouse, the range has even reached 2,500-3,500 Yuan/ton, and the competitiveness of imported cotton and the attractiveness to cotton enterprises have declined rapidly. 

 

Third, since the second quarter of 2022, the RMB exchange rate has depreciated sharply, and the cost of imported cotton and yarn has continued to rise. According to statistics, the RMB depreciated by 8% from January to August due to factors such as the Fed’s continued interest rate hike process and the weakening of the Euro.