Cotton Imports Expected to Increase in China and Pakistan

(WASHINGTON, DC) China’s addition of 800,000 metric tons (MT) of cotton import quotas this year is expected to push imports up to 1.5 million metric tons (MMT) in marketing year (MY) 18/19. With imports from the U.S. constrained by the additional 25 percent tariff applied by China beginning in July, importers will seek alternative cotton supplies from Brazil and Australia. China’s cotton production is forecast to remain virtually unchanged next season at 6 MMT. Maintained by steady economic growth, cotton use will be stable at 9 MMT. With increased sales from the state reserves, cotton stocks are forecast to fall significantly by the end of the marketing year, down to 6.7 MMT from an estimated 10 MMT last year according to USDA’s Foreign Agriculture Service (FAS).

At the same time, Pakistan’s 2018/19 cotton production is estimated at 7.8 million bales, down eight percent from the previous estimate and five percent from last year’s production level. Uncertain conditions in domestic and international markets, coupled with pest infestations, affected cotton production. Yet the largest factor, according to the FAS, is acreage reductions. The shortfall in domestic supplies will be bridged through imports, with imports this coming season forecast at three million bales.