China is well on its way to becoming a big cotton importer. Eight years ago, China was growing over 15.3 million acres of cotton. This year, it’s only going to plant 7.2 million acres. This has major implications for the market as China is the world’s largest cotton consumer. In two or three years, China could become an importer of 15 million bales a year.

China is expected to produce around 22 million bales this marketing year and consume around 35 million bales, creating a deficit of around 13 million bales. Most of this will be met with cotton from its reserves, although China will import about 4.5 million bales.

Since 2007, cotton demand has continued to languish mainly due to fashion trends favoring products made from manmade fibers. Polyester is at a strong price advantage to cotton in China. Polyester costs half as much as cotton to a Chinese mill. China has an advantage to making and selling these products and this is one of the reasons cotton’s share has continued to fall.

On a positive note, the cotton blend level in China’s spinning industry appears to have bottomed out about two years ago and is slowly coming back.