The sharp depreciation of Chinese yuan in Aug resulted into the sharp deficits for Chinese buyers

In Aug, imports of US cotton reached 77.6kt, up 23% year on year, but down 4% month on month. Imports of Brazilian and Australian cotton reduced obviously, as the arrivals delayed somewhat this year, which may be attributed to the fast decrement of ICE cotton futures, leading to delayed shipment or defaults. From Jan to Aug 2019, imports of US cotton totaled 680.6kt, up 16.19% year on year, that of Indian cotton were 84.7kt, down 56.29%, Brazilian cotton 92.1kt, down 0.67%, Australian cotton 33.7kt, down 65.25%.

The sharp depreciation of Chinese yuan in Aug resulted into the sharp deficits for Chinese buyers as they procured Vietnamese yarn in Jul for the preparation of buoyant season. Due to high product inventory, Vietnamese plants reduced the demand for cotton. In Sep, cotton imports may continue to reduce.