With the ongoing tariff war between the US and China, it’s the US cotton industry which is expected to get directly hit as China piles on an additional 25 per cent tariff on US uncombed cotton imports. This will affect the US cotton industry rather significantly as China has traditionally been a large buyer of US cotton and a massive supplier of products back to the US market.

About 95 per cent of the American Pima crop is exported every year and typically China imports about 40 per cent of that crop. The highly prized long-staple American Pima cotton is soft to the touch and durable. Most of the crop is exported to China and India. For the crop year that runs through July 31, China has purchased 2,39,200 bales or approximately 120 million pounds of the fiber.

Already some 2,05,000 bales have been shipped, leaving a balance of about 34,000 bales for this year in addition to some 34,000 bales of forward contracted cotton sales for the next crop year. These existing sales along with the entire new crop are at risk relative to the proposed Chinese tariffs.

China is one of the principal buyers of US cotton as is Vietnam. The United States is the second largest exporter of cotton, having shipped around 15 million bales of cotton overseas last year.