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COVID‐19 and cotton import demand in China

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  • Andrew Muhammad
  • S. Aaron Smith
  • Tun‐Hsiang Edward Yu

Abstract

As the leading import market for cotton, and leading export market for manufactured products like clothing and apparel, China provides the ideal case for examining how the COVID‐19 pandemic is affecting international cotton trade. The COVID‐19 outbreak has resulted in decreased global demand for products like clothing, directly affecting China's demand for cotton from exporting countries. In this study, we examined Chinese demand for imported cotton by product form (raw cotton and yarn) and by source (e.g., United States, India), as well as the dynamic price relationships across countries. Using year‐to‐date trade, demand estimates, and price forecasts, we assessed the impact of COVID‐19 on Chinese imports and the countries supplying this market. Depending on the projections, the most severe impacts of COVID‐19 on Chinese cotton imports are either behind us, or the latter half of 2020 could potentially be just as bad as the early part of the year. The outcome depends on the impact of manufactured‐product prices on imports; the effects of which are large but insignificant. As a consequence, even when imports from certain countries are projected to significantly decline, projection intervals suggest the possibility of a negligible decline or even a positive outcome.

Suggested Citation

  • Andrew Muhammad & S. Aaron Smith & Tun‐Hsiang Edward Yu, 2021. "COVID‐19 and cotton import demand in China," Agribusiness, John Wiley & Sons, Ltd., vol. 37(1), pages 3-24, January.
    • Handle: RePEc:wly:agribz:v:37:y:2021:i:1:p:3-24
    DOI: 10.1002/agr.21682
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