US Cotton Loses Its Chinese Market. Non American Cotton Is Popular.

According to the monthly report of the US Department of agriculture in July, China's cotton imports in 2019/20 are expected to continue to grow, consolidating its position as the world's largest cotton importer. This month, China's 2018/19 import forecast was up to the highest level in the past five years, as China launched its reserve cotton to ensure domestic market supply. Despite the significant increase in cotton imports in China, the US cotton exports to China were significantly reduced. Cotton, cotton and other cotton producing areas in Brazil increased their share in China's exports and the share of the Chinese market.

Since July 2018, China has imposed a 25% tariff on cotton and cotton, which has significantly reduced its position in the Chinese market. The tariff of 25% is equivalent to the import cost of 4000 yuan (or 600 US dollars) per ton. Moreover, the export volume of Brazil cotton exports was higher in the year of 2018/19, making it more competitive than that of the US cotton, while the inherent advantages of Australia cotton and a large number of last year's carry over inventory also kept the recent export to China high.

Despite the adverse effects of competition from other producers and high tariffs, the United States exported 1 million 300 thousand bales to China from August 2018 to May 2019. Although the US exports to the world in 2019/20 are expected to grow year-on-year, the export to China will still be affected by the huge supply of new cotton in Brazil and the continued adverse effects of China's tariff increase.