Brazil has been the prime beneficiary of the US’s losses in China, as the South American country saw its share of the Chinese cotton import market jump by 170% in 2018/19, new data shows.
Although Phase One of the US and China’s trade agreement went into effect on 20 February, the cotton industry had already seen several changes as a result of the troubles. The International Cotton Advisory Committee’s (ICAC) June report shows Brazil’s share of China’s cotton import market increased, as US exports to China wilted under the 25% tariff.
The news isn’t all bad for the US, however, which is still expected to export 3m tonnes globally in 2019/20, and from August through April saw its shipments to China reach 277,000 tonnes, up 29% from the previous period.
“The Covid-19 pandemic has turned the cotton world upside down, but not everything has changed in the past six months,” says the ICAC. “China and the United States, for example, have suffered from the virus like every other country recently — and continued to batter each other with tariffs, as well — but they will remain the world’s largest cotton importer and exporter, respectively.”
Through the August to April 2019/20 period, most countries will see their shipments to China decrease between 7% and 73%, with West Africa’s exports declining by 48%.
In terms of prices, the Secretariat’s current projection for the year-end 2019/20 average of the A Index has been revised to 71 cents per pound this month. For the year-end 2020/21, the price projection is 58 cents per pound.
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By GlobalData
