The US Department of Agricultureâ€™s Beijing bureau pegged at 1.30m tonnes (5.97m bales) Chinaâ€™s cotton imports in 2017-18, on an August-to-July basis. A rise of more than 200,000 tonnes year on year â€“ far bigger than the 58,000-tonne increase, to 1.15m tonnes (5.30m bales), that the USDA has officially penciled in.
The bureauâ€™s estimate comes amid persistent market talk that China may be poised for accelerating buy-ins, with some rumours of a potential increase to the import quota of 894,000 tonne allowed in with a 1% tariff, under an agreement with the World Trade Organization.
US officials said that Chinaâ€™s cotton imports will recover more than had been expected this season, due to the need for high-quality fibre by a domestic spinning industry.
Indeed, the bureau itself underlined that â€œsince July, anecdotal reports have circulated that the government might be considering special approval to allow for some imports of high-grade cotton.
Given the Chinese textile sectorâ€™s increasing demand for high-grade cotton, traders anticipate the government may increase its flexibility in issuing additional import quota.
Consideration of all these factors, it is logical for the government to approve some cotton imports to meet the industry demand in 2018, the bureau said, although adding that it remains unclear when the government will allow additional cotton imports.
Ron Lee, at US-based McCleskey Cotton, reported that China will continue to be a strong buyer of US cotton, perhaps even increasing quota after the turn of the new year.
Latest Chinese cotton import data, for October, the month after the closure of the governmentâ€™s 2017 auction programme of supplies from the countryâ€™s bloated cotton stockpiles, came in at 78,128 tonnes, according to customs data, a rise of 89% year on year.
The purchases took to 983,450 tonnes Chinaâ€™s cotton imports in the first 10 months of this year, a rise of 41%, of which 458,588 tonnes were sourced from the US, a jump of 131% year on year.
While this yearâ€™s government auction programme released 3.22m tonnes of cotton to domestic mills, the fibre is said to be of low quality, and the release will not ease the shortage of high grade cotton for Chinese mills, the bureau said.
Meanwhile, demand for cotton overall is being whetted by economic expansion, and a reduction in Chinese cotton premium to global values, making the countryâ€™s mills more competitive.
The USDA bureau said that Chinaâ€™s cotton use in 2017-18 was forecast rising by 335,000 tonnes year on year to 8.50m tonnes (39.0m bales), growth mainly driven by a more market-oriented domestic cotton price,
The bureau added that a further auction of state stocks scheduled for 2018 could see Chinaâ€™s cotton stocks fall a further 3m tonnes, after a decline of 3.2m tonnes this year, to a figure pegged by â€œindustry sourcesâ€ at about 5.2m tonnes.
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