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USDA Cotton: World Markets and Trade

13 August 2012

USDA Cotton: World Markets and Trade - 10 August 2012USDA Cotton: World Markets and Trade - 10 August 2012

USDA Cotton: World Markets and Trade Reports

China: Surging Yarn Imports Will Constrain Cotton Import Demand

China, the world’s largest importer of cotton, in recent months has been importing greater amounts of cotton yarn in response to high internal cotton prices. Similar increases have been seen in imports of cotton fabric and textiles. The stronger import demand for cotton yarn products will constrain cotton import demand, as cheaper imports substitute for domestic yarn. Yarn import levels this year, compared to the level over the last two years, is equivalent to an increase of about 2.0 million bales annually. To date, India and Pakistan have been the primary beneficiaries of this shift. Their second quarter 2012 exports of cotton yarn to China more than doubled compared to the same period last year. The growth in yarn exports should boost demand for cotton in these countries’ spinning sectors.

If China’s demand for cotton yarn continues to expand, it could provide greater cotton yarn export opportunities for ASEAN countries, who recently signed a Free Trade Area Agreement with China. Imports account for 95 percent of ASEAN spinning use. Expanded ASEAN cotton consumption could ultimately benefit the U.S. which has historically had a 40 percent market share of the region’s imports.


For 2012/13, world supply is raised slightly and consumption lowered, as a result ending stocks are raised. U.S. exports for 2011/12 are raised to reflect marketing year totals for export sales, adjusted for the net change in “on own account” exports. U.S. 2012/13 production is up, but exports are unchanged. The 2012/13 forecast season average US farm price is unchanged at 70 cents/pound.


The U.S. spot price and the A-Index continue to show little direction as the market awaits any signal from China concerning its import and reserve policies.


Major Exporters:

  • Australia fell 100,000 bales to 4.4 million on lower import demand in China.
  • Brazil is down 100,000 bales to 3.9 million on lower import demand in China.
  • Malaysia is up 100,000 bales to 650,000 on trans-shipments to several countries.
  • Uzbekistan is reduced 100,000 bales to 2.65 million on lower import demand in China.

Major Importers:

  • China dropped 500,000 bales to 13.0 million on higher beginning stocks.
  • Malaysia is raised 200,000 bales to 1.0 million on trans-shipments to several countries.

Trade Changes 2011/12

Major Exporters:

  • Australia surged 350,000 bales to 4.6 million on strong end of year shipments.
  • Malaysia is raised 100,000 bales to 850,000 due to trans-shipments.
  • United States is up 114,000 bales to 11.7 million based on final export sales data.

Major Importers:

  • China jumped 1.0 million bales to 24.25 million on strong end of season imports.
  • Pakistan fell 200,000 bales to 2.2 million on lower domestic use.
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