adv-06 adv-06

China’s cotton consumption is bound to see a considerable reduction of almost 1 million tons


As the rapid spread of Covid-19 across all countries has led to the cancelation of export orders for apparel in China’s factories, cotton demand in the country is expected to decline by 0.6-1 million tonnes in 2019-20. This has been expressed in China’s cotton futures market. The most actively traded May cotton contract dipped below 10,000 yuan/mt on Zhengzhou Commodity Exchange in the afternoon of March 24, once to the lowest of 9,935 yuan/mt, which was close to the historical low of 9,890 yuan/mt and has declined by 4,515 yuan/mt from 14,450 yuan/mt appeared on January 14 before the Chinese Lunar New Year.

Chinese domestic cotton consumption, influenced by the export orders, is expected to fall by nearly 1 million tons soon. If the state reserves of cotton do not persist, the stock / consumption ratio is estimated at 55%, up 7% from the previous season. With the ongoing pandemic, global cotton consumption may also see a significant reduction.