US ban on Xinjiang cotton may push China to open up to more imports to meet demand
- Washington banned entry of all products using cotton from Xinjiang early this year over China’s alleged ill-treatment of its ethnic Uygur Muslim minority
- Beijing may issue another batch of import quotas soon to meet rising global demand for textiles after awarding 700,000 tonnes last month, an analyst said
Beijing may issue another batch of import quotas soon to meet rising global demand for textiles after awarding 700,000 tonnes last month, said Xu Yaguang, an analyst at Huatai Futures, after China issued just 400,000 tonnes of quotas in 2020.
Xinjiang, China’s top cotton producer
China’s cotton imports have already increased following the US ban, customs data shows. Inward shipments have averaged around 275,000 tonnes a month in 2021, compared with 179,000 tonnes last year and 154,000 tonnes in 2019.
Global brands face backlash in China for rejecting Xinjiang cotton
Huatai Futures’ Xu said the next batch of import quotas would likely be smaller than the 700,000 tonnes last month.
China also issues 890,000 tonnes of low-tariff cotton-buying quotas on an annual basis, so the extra amounts come on top of that. The country awarded 800,000 tonnes of additional quotas in 2019 before the coronavirus savaged the global economy.
The government could issue even more quotas later in the year if more textile export orders are diverted to China from India, said Mao Chengsheng, an analyst at Chaos Ternary Futures.
As well as the additional quotas, Beijing may soon hold its annual sale of cotton from state reserves, said Wang Qianjin, a senior analyst at Shanghai International Cotton Exchange. The government sold 500,000 tonnes of cotton in the first such offer in July last year.