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China’s Cotton Imports May Drop 10% on Higher Prices
Published on: 2011-05-13
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China, the world’s largest cotton importer, may cut purchases by as much as 10 percent this year because of higher prices and borrowing costs, said Yuan Haiying, a Beijing-based consultant who advises companies.

Demand will decline as the government seeks to curb inflation and mills use more man-made textiles, according to Yuan, who has been tracking the agriculture industry in China for the past 20 years. The central bank has raised interest rates four times since October to curb inflation.

Cotton imports plunged 35 percent in April from a year earlier, data from the China National Cotton Exchange show. The country canceled orders for more than 100,000 bales last month, the U.S. Department of Agriculture said. A bale weighs 480 pounds, or 218 kilograms. Prices in New York have plunged 34 percent since touching a record high of $2.197 a pounds in March, mainly on higher demand from the Asian nation.

“Demand was bound to slowdown as that kind of growth was not sustainable,” Yuan said today during an interview in Washington while attending an industry conference. “We could see prices come down further.”

China’s imports totaled 2.84 million metric tons last year, according to customs data. That’s the most since 2006, when purchases were a record 3.47 million tons, Bloomberg data show. The Asian nation is the largest grower and user of the commodity.
 

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