May 11, 2012

China's 2012-13 cotton imports seen to decline up to 20% 

The cotton imports of China in the next marketing year may drop to 3.1 million tonnes from a 3.9-million-tonne projection this year, the USDA said late Wednesday (May 9).

Although China's output is expected to fall next year, and demand projected to rise, the country may draw on reserves to meet local mill consumption, the USDA said.

Output in the year that begins August 1 will likely fall to 6.85 million tonnes, from an estimated 7.2 million tonnes this year, due to lower acreage amid weaker prices and higher input costs, the department said in a report.

China's cotton consumption is expected to grow 4.2% to reach 10 million tonnes in 2012-13, it said.

"Rising domestic and emerging market demand for apparel and textile products will be counterbalanced by sluggish economic performance in developed markets and an end to China's economic stimulus package, both of which will slow consumer spending and weaken demand."

However, high domestic stock levels could weaken import demand in 2012-13, depending on the level of China's market intervention.

The country's reserves, estimated around four million tonnes, may be drawn upon for later use on behalf of the textile industry, it said.