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U.S. Bans More Cotton Imports From China

Move could block majority of Chinese cotton textile imports

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Cotton

U.S. Bans More Cotton Imports From China

  • U.S. Customs issued a "Withhold Release Order" that would ban cotton and cotton products from the Xinjiang Production and Construction Corps (XPCC).
  • XPCC is one of China's largest producers, accounting for 30% of China's cotton production in recent years.
  • The action will force firms shipping cotton products into the United States to eliminate XPCC-produced cotton fiber from their supply chains.
  • Many major clothing brands could not confirm that their supply chains were free of cotton harvested in the region.
  • The XPCC ban follows action against two smaller cotton and apparel producers in September.
  • U.S. apparel makers had criticized a broader ban as impossible to enforce, but have approved the firm-specific actions.

FBN’s Take On What It Means: The administration considered a much broader import ban on all cotton and tomato products from Xinjiang in September. However, depending on how strictly this current move is enforced, it could block the majority of Chinese cotton textile imports as only the few large companies with fully integrated operations can guarantee that no XPCC product has been used. While this action is strong politically, it is expected to provide only mild support to prices for U.S. cotton.

Brazil Exports To Exceed Forecast

  • Brazil’s November soybean exports were reported at 1.5 million tonnes, down from 2.5 million in October and 5 million last year.
  • Total exports for this season since February are at 81.7 million tonnes compared to 68.8 million last year.
  • Last year, Brazil exported 4.7 million tonnes of soybeans in the last two months of the marketing year.
  • Brazil’s export association reports there are no soybean vessels scheduled to leave port in the first week of December.
  • November corn exports were 4.90 million tonnes compared to 5.16 million last month and 4.11 million last year.
  • Corn exports for the marketing year to date are 27.7 million tonnes versus 33.1 million last year.
  • Last year from December to February, Brazil exported 6.6 million tonnes of corn to finish the season.

FBN’s Take On What It Means: Brazil is on pace to reach USDA’s current export forecast of 34 million million tonnes. Bean exports have already met USDA’s projection for the current marketing year of 81.6 million tonnes with two months remaining in the season. We expect USDA to raise the soy export forecast in the December report, but it may not be by very much considering the limited old crop supplies available.

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