Chinese cotton imports are projected at lowest level in five years at 6.4 million bales, which is less than half the volume witnessed two years earlier.
Several factors have pressured demand like the highest domestic production in nine years, lower domestic prices as against prices in foreign countries, and less demand for government cotton reserves.
According to a United States Department of Agriculture (USDA) report, China domestic consumption, when compared with production, has become a more important factor driving import demand.
“This is especially true as Chinese cotton stocks have fallen from historic levels witnessed nearly a decade ago,” USDA observed.
China’s most recent cotton crop rose nearly 4.0 million bales above the previous season to 30.7 million bales, while domestic cotton consumption is forecast slightly below the five year average at 36.5 million bales.
Moreover, beginning stocks of domestic cotton in Xinjiang warehouses were more than 6.0 million bales above the previous year.
“This burdensome level of domestic cotton supplies put downward pressure on imports and spurred greater spinning of domestic lint,” the agency noted.
