International Trade: Tariff Quotas Lead To Increasingly Tight Cotton Imports

According to the feedback of cotton trade enterprises in Qingdao, Wuhan, Zhangjiagang and other places, the total cotton inventory in China's main ports has been rising since the first ten days of August, with the increase of bonded cotton inventory slightly larger, significantly exceeding the decline of non bonded cotton inventory.

On the one hand, in 2023/24, American cotton, Indian cotton, Pakistani cotton, Mexican cotton, and Afghan cotton arrived in Hong Kong, and the warehousing volume continued to grow, completely making up for the decline of Brazilian cotton inventory; On the other hand, there is a shortage of 1% tariff quota. The additional 200000 ton sliding tariff quota issued in 2024 has not yet been issued and 100% of it is non-state-owned, restricted processing trade imports also restrict the use progress. Therefore, the customs clearance rate of port bonded cotton has declined in the past half month, and the progress of "de stocking" has slowed down significantly.

A medium-sized cotton enterprise in Huangdao said that although Zheng Mian's main CF2501 contract once fell below 13300 yuan/ton in the middle of August, most of the traders' base difference remained stable. Some small and medium-sized cotton textile mills that received export orders and just needed RMB resources at low price ports, except for Australian cotton in 2022/23, Brazilian cotton and American cotton, Turkish machine-made cotton, Indian handpicked cotton Sudan hand picking cotton also attracted the attention of cotton using enterprises. Inquiry and shipment were slightly active. However, compared with the increase of bonded cotton inventory, the decline of non bonded cotton inventory was obviously low. From the quotation, the net weight of Turkey machine picked cotton M1-5/32 (Qiangli 28GPT) and SLM1-5/32 (Qiangli 28GPT) in Qingdao Port in the past two days was quoted at 13450 yuan/ton and 13200 yuan/ton, which was nearly 2500 yuan/ton lower than that of Brazilian cotton in the same index.

It is worth noting that due to the increasingly tight import quota of cotton and the implementation of "textile special" sliding tariff quota, the port has recently quoted RMB prices, but the number of foreign cotton resource bills requiring the purchaser to take 1% tariff quota for customs clearance has continued to increase. For example, on August 22-23, Qingdao port took 1% tariff quota for customs clearance of Brazilian cotton M1-1/8 (or M1-3/16, strong 28-30GPT) The net weight quotation is 13100-13200 yuan/ton, which is 2700-3000 yuan/ton lower than the price of customs cleared Brazilian cotton M1-1/8.