Brazil sees huge jump in share of China’s cotton import market but most countries to see declines of up to 73% – ICAC

July 2, 2020

China and the United States might have suffered from the Covid-19 virus like every other country — and continued to batter each other with tariffs, as well — but they will remain the world’s largest cotton importer and exporter, respectively, the International Cotton Advisory Committee (ICAC) said in its latest monthly report.

Although Phase One of their trade agreement went into effect on 20 February, the cotton industry had already seen several changes as a result of the troubles, the association of cotton producing, consuming and trading countries:

  • Brazil has been the prime beneficiary of the USA’s losses in China, as the South American country saw its share of the Chinese import market increase by 170% in 2018/19.
  • The news isn’t all bad for the USA, which is still expected to export 3 million tonnes globally in 2019/20 and from August through April saw its shipments to China reach 277,000 tonnes, up 29% from the previous period.
  • For the 2019/20 season, most other countries are expected to find their shipments to China decrease, with West Africa’s exports declining by 48% and other countries that export to China seeing contractions ranging from 7% to 73%.

In terms of prices, ICAC’s current projection for the year-end 2019/20 average of the A Index has been revised to 71 cents per pound this month. The price projection for the year-end 2020/21 average of the A Index is 58 cents per pound this month. 

Highlights of the report:

  • China and the USA will remain the world’s top importer and exporter
  • Brazil’s share of China’s import market increased 170% in 2018/19 as US exports to China wilted under the 25% tariff
  • Through the August – April period of the 2019/20 market year, US exports to China are up significantly but most countries will see their shipments to China decrease between 7% and 73%
  • The Secretariat’s current projection for the year-end 2019/20 average of the A Index has been revised to 71 cents per pound this month
  • The price projection for the year-end 2020/21 average of the A Index is 58 cents per pound this month

Source: https://www.msn.com/en-in/money