China Could Boost Imports Due to Poor Yield and Quality
Low temperatures and heavy rains will drive down not only yields, but quality as well.
September 13, 2010
Poor weather conditions might be shrinking the size and quality of China’s cotton crop, which could result in an increase in imports for what is already the world’s top cotton importer.
Recent estimates put this year’s crop at somewhere between 29.33 million 31.16 million bales, a decrease of as much as 6 percent from 2009 (which reflected a 13 percent drop from the 2008 crop of 35.29 million bales).
Low temperatures and heavy rains will drive down not only yields, but quality as well. Cold fronts have hit northern China and lowered temperatures by as much as 5 degrees Celsius, and excess rains are causing bolls to become moldy, lowering the crop’s quality.
To make up for the shortfall, imports are expected to jump to 12.5 million bales, an increase of 14 percent from the previous year’s total of 10.9 million bales. About 40 percent of the 1 million bales exported so far by the United States, the world’s top importer, have gone to China. Unusually high cotton prices have prompted the Chinese government to auction off some of its reserves to meet the demands of the local textile industry, but global consumption continues to outpace production.
In its most recent auction, cotton from China’s reserves was selling for $2,732 per metric ton. Almost half of the 600,000 metric tons up for auction has already been purchased.
A metric ton is 2,200 pounds, or 4.58 bales.