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Sourcing of Indian cotton by Chinese mills on the rise


Cotton stocks at China’s ports are largely from India, ending the India-China tussle. As per feedback from cotton traders and overseas entrepreneurs located in Qingdao, Zhangjiagang, Shanghai and other places, enquiries for bonded cotton and customs clearance cotton (imported cotton) have shown signs of recovery since mid-December.

Imported cotton attracted attention and favour of cotton textile mills and middlemen that has resulted in continually active transactions. This rebound in transaction of imported cotton was mainly due to the widening of price difference between domestic and foreign cotton as well as early overdraft of 2021 cotton import quotas by some buyers.

As per a cotton company based in Jiangsu, sales of high-quality Indian cotton have gradually improved since October ’20 and squeezed the loss of Brazilian cotton ranked second in China’s cotton imports in October and November, second only to the cotton sourced from US.

Meanwhile, in the past two months, the price difference between Brazilian and Indian cotton – which is the same as commodity inspection index – has widened to 800-1000 RMB/tonne, and price of Indian cotton has become more competitive. This upward trend has been facilitated by the short transportation distance and the increase in freight costs as the impact of the epidemic on ships is relatively controllable. Hence shipment and delivery of Indian cotton is normal compared with Brazilian cotton and American cotton.

It is estimated by the end of December ’20, the total amount of bonded cotton in China’s main ports may reach 410-440 million tonnes, which is largely contributed by US cotton, Brazilian cotton, Australian cotton, Indian cotton, African cotton, Central Asian cotton and European cotton.