At the end of April, the National Development and Reform Commission issued the “Announcement on Matters Concerning the Application for Import Quotas at Preferential Tariff Rates Beyond the Cotton Tariff Quota in 2021.” The author believes that two points are worthy of attention: First, the issuance of sliding tariff cotton import quotas in 2021 is still ” “Textile Special”, cotton traders and import companies are excluded from direct application; second, the sliding tariff cotton import quota will mainly be used by textile companies for their own use (or only for their own use), and the hope of customs clearance sales is basically dashed, because non-state-owned enterprises Cotton that has cleared customs with part of the trade quota cannot be traded.
Judging from the survey, cotton-related companies and investment institutions generally believe that the introduction of policies at the end of April to increase cotton import quotas with sliding quasi-tariffs will help textile and clothing foreign trade companies receive orders and reduce costs. Reduce raw material procurement costs and improve product competitiveness.
First of all, the issuance of additional cotton import quotas with sliding quasi-tariffs is very timely. Since October 2020, my country’s macroeconomic data has been strong, the global epidemic has also reached an “inflection point”, and trade and transportation have accelerated. Recovery, coupled with the U.S. government’s import ban on Xinjiang cotton products, has led to a significant increase in the amount of cotton and cotton yarn imported into my country. The shortage of import quotas has hindered the production and sales of some small and medium-sized textile companies.
Secondly, from 2018 to 2020, China has issued an additional 800,000 tons, 800,000 tons, and 400,000 tons of non-state trade cotton import quotas (in 2018 and 2019, enterprises can apply separately for processing Trade quotas or quotas that do not limit the trade method can also be applied for at the same time; but in 2020 they are limited to processing trade imports); although the domestic cotton supply is relatively sufficient in 2020/21, the textile and clothing export environment has deteriorated, so in 2021 The additional issuance quantity of sliding quasi-tariff quotas ranges from 400,000 to 800,000 tons, which can meet the actual needs of cotton spinning enterprises without causing waste.
Finally, the impact on the domestic cotton futures market is limited. The 100% non-state trade quota prevents imported cotton resources from entering the spot market, and the additional quota of 700,000 tons is far lower than the 2 million tons previously rumored in the market, of which 400,000 tons are limited to imports through processing trade. In addition, cotton planting in 2021 is coming to an end, and the impact of additional import quotas on cotton planting area and market sentiment will be minimized. </p