Chinese cotton imports in December were down 29 per cent year on year at 188,200 tonnes in December , as demand from the world’s largest cotton consumer remains muted. And concerns are growing that further attempts by the Chinese government to reduce its cotton stockpiles could push down demand for the fibre even further.
The December numbers leaves imports for the 2015 calendar year to 1.48 million tonnes, which represents at least a 9-year low. The US Department of Agriculture has forecast Chinese imports across the 2015-16 marketing year, which runs to August, at 1.2 million tonnes. This is down from 1.8m in the prior crop year.
According to a cotton merchant Chinese cotton imports could be as low as 1 million tonnes this season. The merchant says that USDA’s supply and demand statistics overstated mill demand by nearly 1 million tonnes and has suggested that in the long term China’s reserves could end up being pushed onto the international market.
There may be even lower cotton demand from China if the government again attempts to draw down its huge reserves. The Chinese state cotton inventories, accumulated during a period of stockpiling intended to boost domestic prices, is believed to be around 11 million tonnes. Auctions last year proved unsuccessful, due to low demand, government?s reluctance to undercut private sellers, and the perceived low quality of the cotton on offer.