By admin       2018-06-21

Jun 20, 2018 - India's cotton shipments to China could grow five-fold to 5 million bales (850,000 tonnes) in the next crop year as exporters rack up orders amid a trade war that is forcing the world's top consumer to look for other sources of supply. The United States, the world's biggest exporter of the fibre, has cornered the bulk of Chinese imports for at least a decade. But China's decision to impose a 25 percent import tax from July 6 on American farm commodities, including on cotton, in retaliation for tariffs enacted by the administration of U.S. President Donald Trump will allow India to grab a bigger share of the Chinese market. "In the last few weeks we are getting good inquiries from China for the new season crop," said Arun Sekhsaria, managing director of D. D. Cotton, an exporter that earlier this month sold cotton to China for shipments in November and December. "If the 25 percent duty stays there as announced, then India could export 5 million bales to China," he said. India has already signed contracts to ship 500,000 bales (85,000 tonnes) of their new season harvest to China, officials said last week, in rare advance deals. In response to U.S. tariffs on $50 billion in Chinese goods, Beijing slapped import taxes on cotton, as well as on other commodities and products from the United States, even as its own state reserves of the fibre are depleting. "Everybody is worried about the trade war nowadays so everyone is switching from the U.S. to other origins," said a Chinese trader. Once the world's top cotton importer, China has seen its imports shrink from more than 5 million tonnes in 2011/12 to around 1 million tonnes last year, mainly due to efforts to reduce its state stockpiles. But, as the inventories work down, China has begun allowing more imports. Last week, China approved 800,000 tonnes of additional cotton import quotas for 2018, the first time it has given any additional quota in five years. China is set to return as a major cotton importer, taking 10 million to 15 million bales (2 million to 3 million tonnes) a year by 2019/20, compared with 5 million bales this year, according to Tim Bourgois, head of the cotton platform at Louis Dreyfus Company. "Chinese demand is huge. This is an opportunity for India to raise exports," said Atul Ganatra, president of the Cotton Association of India. Strong demand from China could help lift India's overall exports to as much as 10 million bales in 2018/19, highest in five years, as demand from traditional buyers like Bangladesh, Vietnam and Pakistan also remains healthy, said Ganatra. For the 2017/18 crop year ending on Sept. 30, India is likely to export around 1 million bales to China, Ganatra said.

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