China and Australia have been walking on eggshells around each other for quite some time now due to the numerous disputes, accusations and a mutual loss of trust which has caused the relationship to further deteriorate. Presently due to this cold war, the Australian cotton industry faces the likely loss of its 611 million Australian dollars cotton trade to China.
Cotton industry in Australia is completely dependent on exports. Moreover, Australia’s cotton industry is the backbone of the agricultural sector in terms of offering monetary support. The exports are worth around 2 billion dollars every year. Australia is one of the world’s best four cotton exporters, contending in a vigorously financed global market and irony here is that their major targeted market is China.
Australian cotton has been sourced generally by Asian and sub-continent markets for quite a while and gradually acquired the reputation as a reliable supplier of premium cotton. Therefore, Australian cotton is profoundly respected in the traditional markets of South Korea, Japan, Indonesia and Thailand.
In contrast to China, India or Pakistan, these traditional markets for Australian cotton lack their personal sources of supply of local production. The reason that they make these countries authentic buyers is because they are wholly dependent on imported cotton.
The competition for cotton export in the market is tough as Australia is up against Brazil and the US and the targeted market is Indonesia and Vietnam.
The U.S. remains the predominant cotton provider to Vietnam, with more than a 48 percent share of Vietnam’s total cotton imports. Brazil, India and Australia, in that order make up another 40 percent of the cotton imports.
