Cotton exports by the US, Brazil and India to China have increased significantly in recent months despite 1 per cent tariff or under sliding-scale duty on cotton imports. In 2020-21 season from September 2020 to February 2021, China imported 1.66 million tons of cotton. If it uses the 2 million ton quotas, its imports may reach 3.66 million ton, says a report by the CCF Group.

Allocation of quotas will increase cotton supply to China and drag down its domestic cotton prices. Lower cotton prices will restrain growers' planting enthusiasm, leading to more competition of cotton and food crops on fields. With the decline in domestic cotton production, it is bound to increase imports to make up for the domestic supply gap. The short-term release of the 2 million tons of sliding-scale duty quota will inevitably lead to damage to this policy.

The report advises the government to issues quotas step by step according to domestic conditions, which will be more conducive to protecting the development of the domestic cotton textile industry.