CNCotton: Powered by fast-growing textile industry, the cotton consumption of China is soaring, making China the largest cotton importer in the world. Experts point out that the cotton supply in China has entered into a strategic period featuring an increasing dependence on imported cotton. International market is facing the risk of speculation on"Chinese factor."
China imported less than 200,000 tons of cotton before 2002. The quantity has been increasing since 2003. China Cotton Association (CCA) forecasts that China has a production and consumption gap of 3.7 million tons this year, which will import 50% of the worlds total export.
Mao Shuchun, expert of the Cotton Institute, said that Chinese Academy of Agriculture, the growth of yarn output in China would reach 8%-10% during the 11th Five-Year Planning (2006-2010), which signifies an averaged 10% annual growth of cotton consumption. Following this trend, even if the cotton acreage could increased by 10 million mu from current 80 million mu, the cotton import is expected to reach 4.5-5.5 million tons by the end of the 11th Five-Year Planning. It means the dependence on imported cotton will increase from current 36% to 40%. Thus, the cotton resource in China has entered into a strategic period of tight supply.
According to Guo Mingquan, Vice Secretary of CCA, the increasing dependence on imported cotton will throw Chinese textile industry into the potential risk aroused by speculators in the international cotton market.
Some futures analysts claim that futures prices of copper, oil and gold have doubled the historical high point. The agricultural commodities, however, just showed a moderated price hike, which provides a further space for uptrend. As Chinas demand for cotton is evident, so it will provide more opportunities for speculators.
