China's cotton imports for MY06/07 are forecast to surge to 4.1 MMT (18.8 million bales) and production is forecast at 6.05 MMT (27.8 million bales). The United States is expected to remain the main source of cotton imports, although market share is expected to decline for MY05/06.
The high imports are driven by both increased exports of and domestic demand for textile and apparel products. Stocks continue to be very tight.
Total imports for MY06/07 are forecast to reach a record of 4.1 MMT. This forecast is based on strong demand from China's burgeoning textile industry, which is expected to consume 10.2 MMT of cotton in MY06/07, although domestic production is expected to increase to 6.05 MMT.
The gap will be filled by imports, primarily from the United States. Production for MY06/07 is forecast to increase to 6.05 MMT from the decreased production of 5.7 MMT for MY05/06 due to a 7 percent increase of planted area and the same expected high yields as the year before.
The increased cotton prices since the harvest of the 2005 crop and better profits received by cotton farmers attributed to the area expansion for 2006. China's expanding textile industry is driven both by exports and increased domestic consumption.
Textile and apparel exports for MY06/07 are expected to continue growing due in part to the removal of textile quotas on January 1, 2005. Strong domestic demand for textiles and apparel, which is driven by Chinese consumers' increased disposable incomes, also is increasing demand for cotton.
marketing@alchempro.com
