In recent years, Australia has “benefited a lot” from China’s increased taxes on U.S. cotton. However, as China-Australia trade has gradually gone off the rails, Chinese buyers’ interest in Australian cotton has dropped significantly.
According to “Australian Financial News” on February 22, Australia’s cotton harvest is about to usher in a bumper harvest. The harvest is expected to more than quadruple that of 2020 to 2.5 million bales, with a value of A$1.5 billion ( Approximately RMB 7.6 billion). This was supposed to be a happy event, but the “largest financier” in previous years said that he would not buy again, causing concern in the industry.
Are Chinese buyers “abandoning” Australian cotton? Australia’s losses will reach 4 billion!
It is reported that Australia is the world’s third largest exporter of raw cotton. The country’s cotton production accounts for 2% to 3% of the world’s total output, and its export volume accounts for 5% of the world’s total exports. To 10%, 95% of the cotton produced is exported. The main export destinations are China, Indonesia, Japan, South Korea, etc., which can generate an annual income of about 1 billion Australian dollars and solve the employment problem of 10,000 people at the same time.
Among them, as the world’s largest cotton importer, China has also become the largest export destination of Australian cotton. Data show that the Chinese market usually accounts for 65% of Australian cotton exports, worth approximately A$800 million (approximately RMB 4 billion). In other words, if the Chinese market is lost, Australian cotton exporters will suffer annual losses of 4 billion yuan.
In fact, in October 2020, many foreign media reported that because relevant departments are about to implement an import quota system for cotton-the total quota in 2020 is 894,000 tons, China will reduce its imports of cotton. In this context, Australian cotton will be “abandoned” by Chinese buyers. Based on this, Australian media also stated that Australian cotton will face a “devastating blow.”
It should be noted that the “abandonment” of Australian cotton by Chinese buyers has not been officially confirmed or fully explained. For this reason, Australian Agriculture Minister Littleproud also called for, It is hoped that China will “clarify” the situation.
China-Australia trade will decrease by 95%, and Australia’s losses will reach 543.1 billion!
Although it has not been officially confirmed that Chinese buyers will not buy cotton, China has already taken action on wine, barley and other commodities. Take wine as an example. In November 2020, my country announced that it would charge fees ranging from 107.1% to 212.1% for wine originating in Australia. In December of the same year, my country announced that it would charge various suppliers an additional 6.3% to 6.4%. Waiting costs.
Under China’s two “attacks”, Australian wine exports to China also plummeted by 95%. In addition, Australian media also concluded that due to the obstruction of exports to China, more than 20 billion Australian dollars (approximately RMB 101.6 billion) of Australian export products will be affected in 2020.
Even iron ore, the most important product in China-Australia trade, is also in “danger.” According to relevant media reports, China has quietly lifted its two-year scrap metal import order recently. Economists believe that my country’s move is to further reduce imports of Australian iron ore. It is reported that in January, my country had imported 30 million tons of recycled steel scrap from Japan.
It can be said that the market share of many Australian commodities in China is gradually declining. According to modeling data by Australian economists, if China-Australia trade decreases by 95%, Australia will GDP will lose 6%. Calculated based on the country’s total GDP of 1.4 trillion US dollars in 2019, the country’s losses will reach 84 billion US dollars (approximately RMB 543.1 billion).
What’s more important is that after China no longer chooses Australian products, there are still products from many countries to choose from. However, after Australian products lose the Chinese market, it will be difficult to find a product that matches the Chinese market. The market is comparable to the market. In the words of the Australian media, Australia needs China more than China needs Australia. </p
