Some companies in Western countries have refused to use Xinjiang cotton in response to the U.S. ban, putting Chinese textile exports under threat. Some analysts say China may increase cotton imports, because local textile mills use Xinjiang cotton, may lose export orders.
Bloomberg reported on March 30 that the rejection of Xinjiang cotton threatened China’s textile export industry, and China may import more cotton to replace the Xinjiang cotton rejected by some Western companies.
The U.S. has banned imports of all products containing Xinjiang cotton, which accounts for more than 80 percent of China’s output, citing concerns about the human rights situation in Xinjiang, where Hennes & Mauritz AB, Naiji and Adidas have all pledged not to use Xinjiang cotton.
Xu Yaguang, an analyst at Huatai Futures, said the only option now may be to increase cotton imports because if certain textile mills use local cotton, their export orders will take a hit.
According to his estimates, the cotton import slip quota will return to the 2019 level of 800,000 tons this year as demand for high-quality cotton increases.
Wu Faxin, a senior industry insider at industry portal shaxianbao.cn, said the export outlook for Xinjiang-containing cotton products is not optimistic and that Xinjiang cotton consumption could fall by as much as 20 percent. Wu Faxin expects that exporting countries in Brazil and Africa will benefit from the additional demand.
Good Cotton Development Association (Better Cotton Iniciative, BCI) China regional director Wu Yan alleged that its headquarters boycott move will prevent 500,000 tons of Xinjiang cotton into the global supply chain.
On Monday, the Communist Party’s official media, China Daily, quoted a Xinjiang official as reporting that some cotton mills in Xinjiang had laid off workers due to poor sales after some global brands chose not to source cotton and yarn from the region. Suppliers to retail brands have also stopped placing orders with Xinjiang producers.
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