Market Trends: Focus On The Export Data Of Australian Cotton To China

According to customs statistics, in April 2024, China imported 344000 tons of cotton, a year-on-year increase of 309.27%, of which Brazil accounted for 47.89%, the United States accounted for 37.12%, Turkey accounted for 5.28%, and India accounted for 3.21%. Australia's cotton imports were small, but in 2023/24 (from September 2023 to April 2024), Australia's cotton imports exceeded 218000 tons, a year-on-year increase of more than 700%, The growth rate was significantly higher than that of competitors American Cotton and Brazilian Cotton.

According to the industry analysis, the decline of Australian cotton imports in April (March accounted for 3% of China's imports in the same month) is mainly related to the fact that the sales cycle of Australian cotton in 2022/23 has basically ended (China's main port bonded, spot Australian cotton quantity is increasingly scarce), the price difference between Australian cotton and American cotton, Brazilian cotton has widened, and the tight supply of high-quality cotton resources at ports, traders' strong willingness to sell goods and other factors.

Tony Geitz, chairman of the Australian Cotton Merchants Association, said that in 2022 and 2023, 80% of Australia's cotton will flow into the four major markets of Vietnam, China, Bangladesh and Indonesia, of which Vietnam will still take the first place in the proportion of 37% in 2023, while China's proportion will rise sharply to 24%, and the gap in import volume with Bangladesh, Indonesia, India and other countries will rapidly widen. Some institutions, international cotton merchants and traders expect that the export of Australian cotton to China will continue to grow at a high speed in 2023/24, and seize the market share of American cotton with high indicators. China's share is expected to reach 35-40% of the total export of Australian cotton, mainly due to the following factors:

First, the relationship between China and Australia continued to recover. Following Foreign Minister Wang Yi's visit to Australia, China cancelled the "double anti" measures against Australian wine (before that, Australia's coal, logs, barley, hay and other products have returned to the Chinese market in succession); In June, Chinese Premier Li Qiang will visit Australia, which is expected to consolidate the economic relations between the two countries.

Second, affected by the Red Sea transportation crisis and the soaring cost of routes between China and the United States (including China and South America), Australian cotton has shown its advantages in short shipment time, timely shipment and low freight for China's exports. The Australian Cotton Merchants Association said that it only takes 12-18 days to transport Australian cotton to Qingdao, 15-20 days to Shanghai, 20-25 days to Zhangjiagang, 20-25 days to Ho Chi Minh City, and 18-23 days to Jakarta, Indonesia. Australian cotton has more advantages than American cotton and Brazilian cotton in transportation.

Third, it is self-evident that high grade and high index Australian cotton is of great importance to Chinese enterprises to receive high-end and high value-added export orders (including traceability orders). Due to the high quotation of Pima cotton, Egyptian Jiza cotton and domestic long staple cotton, it is not uncommon to use high-quality Australian cotton instead of medium staple cotton and long staple cotton. Most contracts for high profit orders explicitly use Australian cotton, American cotton C/A or a certain proportion of Pima cotton.