Chinese cotton imports decreased by around 26 percent in June compared to last year owing to relatively high international prices and a lack of quotas for shipments that impacted overseas purchases. The world's top consumer of the fibre imported just 161,800 tonnes in June, showcasing that the total for the first six months of the year plunged 33 percent from the same period in 2014 to 933,900 tonnes.
After lifting its cotton stockpiling policy, Beijing has been trying to boost consumption of locally-grown cotton, with industry insiders saying that the government issued 894,000 just tons of import quotas this year, the minimum required under WTO commitments. "The price differential between domestic and international prices kept narrowing; even for mills with quota availability, imported cotton didn't look so attractive anymore," said Switzerland-based trading firm Reinhart in its weekly market report.
Chinese prices are under pressure from significant leftover commercial stocks as well as sales of state reserve cotton, which kicked off last week, adding supply to the market. Zhengzhou futures also fell sharply following last week's stock market failure. At the same time, purchasing by India's government-backed Cotton Corporation of India (CCI) has propped up the prices of Indian fibre, while US cotton has been already sold out.
