China to slash 2015 import quotas for cotton

The mainland, the world's top consumer of cotton, will slash its import quotas for next year to boost demand for domestic fibre, a senior official said yesterday, in a move that is expected to put downward pressure on international prices.

Liu Xiaonan, deputy head of the economy and trade department at the National Development and Reform Commission, said Beijing would only provide import quotas next year for the 894,000 tonnes that it was required to offer at low duties under commitments with the World Trade Organisation.

Previously, the mainland has offered another type of quota, in addition to the one compliant with the WTO, but Liu said no additional quota would be made available next year.

Non-quota imports are subject to a 40 per cent tariff, so the restricted availability of import quotas will dampen mainland demand for foreign cotton.

In the 2013-14 marketing year, traders estimated Beijing had issued 600,000 to 800,000 tonnes through the additional quota that would not be available next year.

"Apart from the 894,000 tonnes of import quota required under WTO entry commitments … we will not issue additional import quota, instead guiding domestic textile companies to use more Chinese cotton," Liu said.