BEIJING: China imported 72,750 tonnes of cotton in June, down 55.02 percent from a year ago, as mills cut back overseas buying because the reduced availability of quotas for low-tariff imports made the purchases unattractive. Imports in the first six months of 2016 were 431,254 tonnes, less than half of imports during the same period last year, customs data showed on Thursday. A plunge in domestic prices earlier in the year also made importing overseas cotton without quota unattractive.
China is the world’s top textile exporter. The June figure was lower than the prior month, despite the availability of new crop from Australia. “I would have guessed the data would be between 80,000 to 85,000 tonnes,” said one trader who declined to be identified because of company policy.
Imports in the coming months will remain low, he added, with the United States crop already sold out and the cost of the import quota rising alongside higher domestic prices.
Mills are instead chasing supplies from the state reserve, which began selling off old stock in May. Beijing has already sold 1.36 million tonnes of fibre since the sales began, close to 100 percent of the total offer, including almost 300,000 tonnes of imported cotton.
Strong demand has driven up the price to more than 15,000 yuan ($2,248) per tonne this week, compared with average prices of less than 12,000 yuan in May. “It’s the only supply in the market,” added the trader. Beijing has said it will aim to sell 2 million tonnes of reserve cotton this year. The United States agriculture department expects total China imports in the crop year through to end of September 2016 to drop to 980,000 tonnes from 1.8 million tonnes the prior year.
