19. June 2019 | News, Views & Markets

Cotton Inc: Chinese prices moved sharply lower

In his latest Monthly Economic Letter, Jon Devine, Senior Economist at Cotton Inc., pointed out that the China Cotton Index (CC Index 3128B) posted its sharpest declines in nearly five years.

In international terms, values decreased from 104 to 92 cents/lb (-12%). In domestic terms, values fell from 15,600 to 14,000 RMB/ton (-10%).

According to Devine, a central source of uncertainty for the cotton market remains the trade situation between the U.S. and China. These two countries represent not only the world’s largest exporter and importer of cotton fiber, but are also the world’s largest exporter and importer of apparel and the world’s two largest economies.

China implemented a 25% increase in imports of U.S. cotton fiber last July. In the ten months of trade data that have become available since then, there has been a definite shift away from the U.S. Chinese imports from all locations rose 80% year-over-year July-April. Non-U.S. machine picking countries have benefitted the most in terms of volume. Chinese imports from both Brazil and Australia were up 1.5 million bales year-over-year July-April (up 396% and 153% respectively).

edited by Susanne Haase

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