China, which last season lost to India the title of the world's top cotton producer, is to give up top rank in imports too, the International Cotton Advisory Committee said, citing the enhanced competitiveness of polyester.

The committee deepened to 40%, from 34%, its forecast for the top in Chinese cotton imports in 2015-16, taking the estimate from 1.2m tonnes to 1.08m tonnes (5.0m bales).

Imports at that level - besides coming in below expectations of commentators such as the US Department of Agriculture, which forecasts them at 5.5m bales – would be the lowest in 13 years.

And they would, on ICAC projections, demote China to equal second, with Bangladesh, on cotton imports, behind Vietnam, which is expected to buy 1.1m tonnes this season.

"Cotton imports by Vietnam in the first four months of 2015-16," which began in August, "totalled 327,000 tonnes, while those by China totalled 247,000 tonnes," the committee noted.

Cotton vs polyester

The ICAC highlighted the role in Vietnam's rise as a cotton importer, with volumes seen soaring 17% this season, its low labour costs.

"Consumption in both Vietnam and Bangladesh is increasing steadily, due to lower production costs, but both produce very little cotton, and instead must rely on imports to meet demand," the committee said.

However, it also flagged the enhanced competitiveness of polyester, of which China produces 72% of global supplies, making this fibre a particularly acute rival to cotton for the country's mills.

Polyester's discount to cotton has "continued to widen", the ICAC said, reporting that values of the artificial fibre had averaged 48 cents a pound in the first half of 2015-16.

Cotton prices, as measured by the Cotlook A index, averaged 70 cents a pound.

"The ongoing drop in polyester prices cuts into cotton's market share, particularly in China where polyester has been favoured over cotton in recent seasons," the committee said, cutting by 200,000 tonnes to 7.1m tonnes its estimate for Chinese cotton consumption in 2015-16.

New season forecasts

The comments came as the ICAC left little changed its forecast for world cotton inventories at the close of this season, pegging the figure at 20.5m tonnes, a drop of some 1.6m tonnes year on year.

And, in its first estimates for 2016-17, it forecast a further drop in inventories, albeit at a far slower rate, of some 1m tonnes, against expectations of improved production and flat consumption.

Inventories, at 19.5m tonnes, would at the close of 2016-17 fall below 20m tonnes for the first time in four years, but remain high by historical standards, equivalent to 80.7% of annual consumption.

The ICAC gave no explanation for its forecasts, which saw world production improving to 23.1m tonnes, but remaining behind world consumption, at 24.1m tonnes.