China’s 2020 cotton imports from India to increase despite COVID-19 blow

China's cotton imports are likely to rise this year as higher production of medical protective supplies may consume much of the country's fiber reserves, analysts said, while the novel coronavirus pneumonia (NCP) could cause a short-term import delay as logistical services are impacted. 

India, which has been China's largest cotton import source and offers a competitive price, is likely to be the largest beneficiary, said the analysts.

Shipments of around 250,000 bales of Indian cotton to China have been delayed by nearly two weeks, according to a Reuters report.

Kotak Commodity Services Pvt, one of India's top cotton exporters, also said it will stop sending ships to China since it is worried that "the spread of NCP may lead China to close ports and banks," according to a Bloomberg report. 

Shaking off the concern, Jiao Shanwei, editor-in-chief of cngrain.com, a website specializing in grain news, said that there will be a temporary delay in imports as ports, services and other logistics have not fully returned to work yet, but the situation will soon be eased as the whole country is gradually restoring normalcy.

Looking at the whole year, China is likely to largely increase imports of cotton to ramp up mask production, and the country has used much of its cotton reserves, including those from the state reserve, Jiao told the Global Times on Wednesday.

The Mumbai-based company said to make up for any possible shortfall in sales to China, it will look for new buyers of cotton in countries such as Bangladesh, Indonesia and Vietnam, said the report, citing the director of the company.

Analysts noted that it might be hard for the South Asian country to look for alternative buyers in the short term, as India relies on China for cotton exports.

On Monday, India rolled back a ban on medical gear exports to supply surgical masks and other medical accessories to China. The country on February 1 banned the export of all varieties of personal protection equipment, clothing and masks, including N95 masks.

"The temporary ban of medical supplies exports is understandable, as the country also has to ensure its domestic supply in the face of the coronavirus; with a weaker public healthcare capacity, the South Asian country has to prevent massive spread of the virus domestically first," Long Xingchun, director of the Center for Indian Studies at China West Normal University and research fellow at the Charhar Institute, told the Global Times on Wednesday.

There's no need to over interpret and assign blame to that move, Long said.
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