Why Did Cotton Import Increase In December 2018?

According to customs statistics, China imported 220 thousand tons of cotton in December 2018, an increase of 120 thousand tons over the same period last year (an increase of 120%). In 2018/19 (9-12 months), the total import of cotton was 595 thousand tons, an increase of 73.1% over the same period last year, while in 2018, China imported 1 million 574 thousand tons of cotton and grew by 36.16% over the same period last year.

The quota within the tariff (taking into account overloading, allowing the error range, the maximum import volume of about 980 thousand tons); since October 2018, it has issued a sliding tariff tariff quota for cotton imports (imported enterprises themselves to apply for, the maximum quota of 800 thousand tons), but taking into account the middle of the month, the main contract of ICE futures continued to be at the 79-80 cents / pound high level consolidation (sliding tariffs on imported cotton costs are high, almost no competitive advantage). In October, Xinjiang cotton made a comprehensive listing and the cotton price fell all the way, and 1% tariff and sliding tariff import quotas could be extended to the end of February 2019. Therefore, no matter what the textile factories and cotton traders have judged, the utilization rate of the tariff quotas will be lower or less than that of the December before the end of December. There are three reasons for such a substantial increase in cotton imports. First of all, only two cotton import quotas were issued in 2018. First, 894 thousand tons 1% at the end of 2017 under WTO commitments.

Secondly, how much can the quota of 1% in 2018 be extended to the end of February 2019? From the estimation of some institutions, foreign businessmen and importers, there are about 6-8 tons, but we should also note that many enterprises will use the 1% quota exhibition in 2018 until the end of February 2019. Therefore, even if the import volume of these 80 thousand tons is 100%, the import volume will not exceed 1 million 400 thousand tons in 2018.

So where did the 1 million 574 thousand tons of imports come from? The author's view: first, in addition to 1% tariffs and sliding tariff quotas, the state has issued a certain number of special quotas (giving West African cotton and Central Asian cotton); secondly, customs import statistics are not the final number of actual customs clearance; part of the imported cotton is transferred between port warehouses, public warehouses and circulation processing warehouses; third, in order to circumvent our import restrictions or tax avoidance on waste cotton, waste clothing, chemical fiber, short fiber and other commodities, a small number of trade enterprises take risks, and customs declaration is not in conformity with the actual goods.