The US government, which has long been hyping up Xinjiang-related issues, has begun to suppress it again.
Trump got “bad” for “inciting” the Capitol riots , as the countdown to his term enters, he has too much to take care of himself, but he is still staging the “final madness” against China.
According to the Associated Press report, on the 13th local time, the US government used the excuse of “forced labor” again and announced that it would stop importing cotton from Xinjiang, China.
Screenshot of Reuters report
In early December last year, the U.S. Customs It has announced a ban on the import of cotton and products from the Xinjiang Production and Construction Corps, a cotton production giant in Xinjiang that accounts for one-third of China’s output. U.S. Customs officials said that since the “ban” was announced, approximately 43 batches of cotton products have been detained at U.S. ports of entry.
These “bans” will also hurt the United States itself. Bloomberg reports that 1/5 of the world’s cotton comes from the Xinjiang region, and this move by US Customs is a blow to the US apparel industry. The New York Times also previously pointed out that any measures taken by the Trump administration to block Xinjiang cotton imports may have a huge impact on global apparel manufacturers.
American Apparel and Footwear Association, National Retail Federation, National Retail Industry Leadership Association, American Fashion Industry Association In a statement, the agency asked Customs to share the evidence they used to make the decision and also asked the agency to share its enforcement actions.
The New York Times believes that it is difficult for American clothing and food manufacturers to ensure that their supply chains do not contain raw materials from Xinjiang. The American Workers Rights Association estimates that U.S. brands and retailers import more than 1.5 billion pieces of clothing using Xinjiang fabrics each year, representing more than $20 billion in retail sales.
So, what impact will this ban have on my country’s Xinjiang cotton and its downstream industry chain products?
1. From the supply side, Xinjiang is my country’s main cotton producing area
The cotton consumed in China is divided into Xinjiang cotton, real estate cotton and imported cotton. , In addition, a large amount of cotton yarn is imported every year. In the past few years, the output of real estate cotton has been declining year by year, while the output of Xinjiang cotton has increased year by year, and the proportion of Xinjiang cotton output has increased significantly. In recent years, the output of Xinjiang cotton has basically remained at more than 5 million tons, accounting for more than 80% of the total, making it the largest cotton producer in my country. important producing area. Since my country’s cotton production is insufficient to meet demand, my country has to import a large amount of cotton and pure cotton yarn every year. In recent years, the annual cotton import volume is 1.5-2 million tons, and the cotton yarn import volume is about 2 million tons.
2. From the demand side, the United States is my country’s main export market for textiles and clothing
The textile and garment industry is a traditional pillar industry of my country’s national economy, an important livelihood industry and an industry with obvious international competitive advantages. my country is the world’s largest textile and apparel producer, consumer and exporter. my country’s textile and apparel industry has a complete industrial chain, advanced equipment and perfect technology, and has a very high share of the international market.
From the perspective of terminal consumption structure, the proportion of domestic sales of textiles and clothing in my country is almost half and half. , while China’s exports to the US market account for about 17% of China’s total textile and apparel export market. Calculated based on the total terminal consumption of 10 million tons (including 2 million tons of imported cotton yarn converted into cotton volume), the US restriction on Xinjiang cotton will directly affect the amount of Xinjiang cotton at about 500,000 tons.
Although direct consumption does not seem to be large, the market is most worried about brand chambers of commerce There is a phenomenon of choosing sides. If there are risks or uncertainties in using Xinjiang cotton, many brands will ask their buyers not to use Xinjiang cotton to avoid the business risks caused by uncertainty, thus affecting the downstream procurement of Xinjiang cotton. .
From a global perspective, once the United States restricts the import of Xinjiang cotton-related products, it will inevitably have a negative impact on Xinjiang. The price of cotton will be suppressed to a certain extent, and the demand for imported cotton such as American cotton will increase, thus forming a trend of weak internal cotton and strong external cotton, and will cause certain changes in the global cotton, textile and apparel trade structure. However, the quality of Xinjiang cotton is good. As long as a certain amount of bargaining space is given on the price, the cost performance of Xinjiang cotton will be better than that of foreign cotton. If domestic demand is tapped, the demand for Xinjiang cotton is not expected to be too bad.
In general, the impact of the Xinjiang cotton ban on the industry will not be eliminated in the short term. The United States has banned the import of Xinjiang cotton and textiles for some time. It is reported that some large multinational companies have requested not to use Xinjiang cotton in their orders to avoid the risk of uncertainty in the later period.
��Looking at the situation in the downstream of cotton spinning, the impact of restrictions on the use of Xinjiang cotton has intensified the concerns of market participants. In addition, the cost-effectiveness of imported yarn has increased the demand for imported yarn, which has squeezed out the market for Xinjiang cotton products to a certain extent. In the long run, It seems that this may have a greater impact on the use of Xinjiang cotton, and this impact will not be eliminated in the short term. It is recommended that companies prepare for the response as soon as possible.
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