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China returns to US cotton

China is showing interest in cotton from the United States. This is in anticipation of a positive trade deal between China and the United States. While China normally goes in for high quality cotton, it is interested in lower grades (31 and 41 color grade) at a discounted price.

China has traditionally been a large buyer of US cotton and a massive supplier of products back to the US market. About 95 per cent of the American Pima crop is exported every year and typically China imports about 40 per cent of that crop. The highly prized long-staple American Pima cotton is soft to the touch and durable.

China accounts for one-third of total global mill use for cotton. For the 2018-2019 marketing year, China may increase its imports by at least seven million bales or higher to meet its mill needs. Chinese mills like US cotton for its quality, its consistency and its low contamination. China is the US’ most efficient market to ship to in the world so it keeps costs down. China produced roughly 26 million bales last year, leaving a gap of 15 million bales where it turned to imports and stocks to meet the shortfall.