That’s the prediction of William Dunavant, the world’s leading cotton merchant, who spoke at the Beltwide Cotton Conferences at Nashville, Tenn.
"They will be the major player in the U.S. and the world in purchasing cotton," he says.
"I would caution other cotton-consuming countries to be aware that China is going to try and take their customers. They will continue to put pressure on Korea, Taiwan, Japan, Thailand, Indonesia, and other developed countries, and will also exert pressure on developing countries such as Vietnam, Bangladesh, India, and Pakistan."
China today has better technology than other developing countries," Dunavant says, "and I think over the next three years their cotton consumption can go from this year’s projected 17 million bales to 29 million. We’re projecting a 2.5 percent increase in consumption each year through the 2005/06 crop year. The numbers speak for themselves."
It now appears that China’s cotton purchases this year will be higher than originally projected. "We thought they would buy in the world 2 million bales, with 1.2 million of that from the U.S. Through the first week of January, they had already bought 700,000 bales from the U.S. and we’re now projecting that they’ll buy 1.6 million this marketing year. They’ve been more aggressive in purchasing coarse-count styles of cotton because the U.S. price in December was cheaper than their domestic price."
China has announced an import quota of 3.9 million bales for 2003, Dunavant says, but "they won’t import the full quota, and will monitor their quotas with regulations. They will, in my opinion, place some roadblocks to purchases, as they have always done, until they really need the cotton."
Mexico and Turkey will be the other two major importers of U.S. cotton this season, he says, with Mexico projected to take 1.95 million bales — "of which 1.93 will be due to the North American Free Trade Agreement and price." They’ve already bought 1.95 million bales from the U.S., Dunavant points out, so "their purchases will exceed my projected number, but it won’t all be shipped in this marketing year."
Until recently, Turkey has concentrated on buying its own cotton, he says, "but recently they’ve started buying other growths, particularly U.S." They imported 1.53 million bales from the U.S. last season and are projected to buy 1.3 million this season, but "They will need to become more aggressive buyers in the weeks ahead to meet our numbers," he says.
India and Pakistan are expected to buy U.S. cotton in the weeks ahead. "Pakistan has already bought a nice volume of Pima cotton from California, but very little upland. India is expected to buy 1.8 million bales in the world market, but mostly from other countries than the U.S.
Australia’s crop this year was "a disaster," Dunavant says, the result of the worst drought in 100 years. "Last season, they produced 3.25 million bales of excellent quality cotton; this season, we’re projecting their production at 1.6 million."
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