Australian cotton may lose its once favored market status in China as demands for domestically produced cotton, particularly produced in Northwest China's Xinjiang Uygur Autonomous Region, is soaring, says a report by the Global Times. A report on Chinese cotton news portal cncotton.com reveals, the quantity of Australian cotton that passed customs clearance at major Chinese ports in 2019 and 2020 was low. Most Chinese traders and middlemen were cautious about purchasing Australian cotton, says the report.

Data calculated by the China Cotton Association also shows a fall in cotton import from Australia since 2019. The decline further intensified in 2020 when China imports of Australian cotton declined 68 per cent to 40,170 ton. In the first four months of this year, China’s import of Australian cotton further declined 68 per cent to 12,706 ton.

China was the major destination of Australian cotton from September 2020 to March 2021, accounting for 36.5 per cent of its total cotton exports. The drop in China's imports of Australian cotton came amid growing friction in bilateral relations. In 2020, China's imports from Australia decreased 4.6 per cent on a yearly basis to 796 billion yuan ($123 billion).

As per Jiao Shanwei, Editor-in-Chief, cngrain.com, a website specializing in grain news, slumping exports are a result of cooling diplomatic relations between the two countries.