According to the International Cotton Advisory Committee (CAC), citing the enhanced competitiveness of polyester China, which last season lost to India the title of the world's top cotton producer, is to give up top rank in imports too. The committee deepened to 40 per cent, from 34 per cent, its forecast for the top in Chinese cotton imports in 2015-16, taking the estimate from 1.2m tonnes to 1.08m tonnes (5.0m bales).
According to CAC projections, they would demote China to equal second, with Bangladesh, on cotton imports, behind Vietnam, which is expected to buy 1.1m tonnes this season. ICAC highlighted the role in Vietnam's rise as a cotton importer, with volumes seen soaring 17 per cent this season, its low labour costs.
However, it also flagged the enhanced competitiveness of polyester, of which China produces 72 per cent of global supplies, making this fibre a particularly acute rival to cotton for the country's mills. Polyester's discount to cotton has ‘continued to widen,’ ICAC said, reporting that values of the artificial fibre had averaged 48 cents a pound in the first half of 2015-16.
Cotton prices, as measured by the Cotlook A index, averaged 70 cents a pound. The ongoing drop in polyester prices cuts into cotton's market share, particularly in China where polyester has been favoured over cotton in recent seasons, the committee said, cutting by 200,000 tonnes to 7.1m tonnes its estimate for Chinese cotton consumption in 2015-16.