The Brazilian Association of Cotton Producers (Abrapa) has sealed a new deal to boost exports to China.
After establishing a partnership, in April, with the China Cotton Association (CCA), which represents about 60% of the textile sector in China, Abrapa is now linking with the China National Cotton Exchange (CNCE), representing more than 5,000 Chinese cotton buyers.
Established in 1997 by the Chinese central government, CNCE brings together more than 4,300 spinning mills, responsible for 90% of Chinese consumption, in addition to 90% of domestic cotton traders.
“Brazil is already the second largest supplier to China and its cotton is known both for its quality and for its competitiveness. With a growing presence, its influence in the market also grows”, pointed out CNCE’s general manager, Sun Juan, during the signing ceremony of the memorandum of understanding, this month, which took place virtually.
Vice President of China Federation of Supply and Marketing Cooperatives (ACFSMC), Hou Shunli anticipated that this cooperation format will be a reference in the country. “The memorandum brings together the most influential and important organizations in the sector in each country and serves our long-term interests. We are two complementary nations: on the one hand, the largest global consumer market for agricultural products and, on the other, the one that is becoming the world’s largest agricultural supplier”, he observed.
The vision is shared by the ambassador of Brazil in Beijing, Paulo Estivallet de Mesquita, who participated in the event. “We want China to see us as a reliable partner, capable of meeting their demands. In the case of cotton, the opening of Abrapa’s operation in Asia, in 2020, only reiterates this interest in cooperating with the Chinese”, explained the diplomat.
“The commercial dialogue between Brazil and China is already on the agenda of the international cotton market and tends to intensify, as the objectives of each country are complementary”, observes the president of Abrapa, Júlio Busato.
Although it is the largest cotton producer in the world, China is also the largest global consumer of the fiber and does not fully supply its domestic demand. According to the US Department of Agriculture (USDA), Chinese production was 6.4 million tons in the 2020/2021 harvest, but demand will be 8.6 million tons.
For the 2021/2022 harvest, the expected production is 5.98 million tons, with projections that the industry will need 8.7 million tons. In April, the country announced an extra import quota of 700 thousand tons to increase the fixed volume defined annually (894 thousand tons).