China Considers Raising Import Quota By 1 Million Metric Tons
According to new reports, China may raise its import quota and sell 600,000 tons from government stockpiles before the new crop enters the market in August.
June 24, 2010
(With assistance from Angus Whitley; Editors: Jarrett Banks and Matthew Oakley)
China, the largest cotton user, may raise its import quota for the natural fiber as it sells more from government stockpiles to quench a supply shortfall, an industry analyst said.
The country may import an additional 1 million metric tons and sell 600,000 tons from government stockpiles before the new crop enters the market in August and September, Dong Shuzhi, assistant manager at Jinshi Futures Co., said today.
“China’s cotton supply remains tight and domestic supply seems insufficient to satisfy demand from rising consumption,” Dong said.
China’s cotton consumption is estimated at 10.34 million tons in 2009-2010 season, while production fell to 7.1 million tons in the same period, according to the U.S. Department of Agriculture. Delayed planting this spring also poses a threat to output in 2010-2011, he said.
Cotton-yarn prices have risen faster than cotton this year, increasing demand for the raw material and boosting profits for textile mills, Dong said.
China will need another 2.7 million tons of cotton in the three months between July and September, consuming 900,000 tons a month, he said.
Planting delays due to cold weather in Xinjiang, China’s biggest producer, may slow the availability of the new crop, Dong said. Nationwide harvesting may be delayed until October, up to 20 days later than normal, Dong said.
The government “is working on relevant policies to satisfy the textile industry’s demand and to ensure stability in the market,” the China Cotton Association said today in a statement on its website, without elaborating.
(Story found in original format here.)