Chinese cotton importers reduce bookings

Chinese cotton importers are refraining from booking shipments before April because of uncertainty over the timing and volume of sliding-tariff quotas for 2012, according to a report on an industry web site on Wednesday.
China's cotton traders also are unlikely to book big volumes for January and February shipments since most small- to medium-sized companies are waiting for the sliding-tariff quotas, according to the report on www.cncotton.com, a website operated by the China National Cotton Reserves Corp.
China issues cotton import quotas of 894,000 tonnes each year, subject to an import tariff of 1 percent. Besides that, it also issues sliding-tariff quotas for an uncertain volume of the crop, which is subject to tariffs ranging from 5 percent to 40 percent.
Industry participants expect the price gap between global cotton and local cotton to further expand because local prices will continue to be supported by the government's state purchases, according to the report. Local consumption must be met by imports since high-quality cotton will mainly be consumed by state purchases, it said.