Cotton Australia: China tells its mills to avoid Aussie fibre
The Chinese Government has taken aim at Australia’s billion-dollar cotton industry, in a move that threatens to further jeopardise trade relations between the two countries. See what they’ve done.
CHINA has taken aim at Australia’s billion-dollar cotton industry in a move that threatens to further jeopardise already frosty trade relations between the two nations.
Cotton Australia this morning confirmed that the Chinese Government’s National Development Reform Commission had been actively discouraging Chinese spinning mills from using Australian cotton.
Meetings between Canberra and Beijing are underway this afternoon, as industry attempts to fully understand the situation.
Under World Trade Organisation rules, there is an 890,000 tonne quota for cotton into China, which Australia competes against other nations with.
Federal Agriculture Minister David Littleproud said if Australia was frozen out, then Aussie growers may only be able to trade in China once the quota was hit – at which point tariffs up to 40 per cent would apply.
Mr Littleproud – speaking in The Weekly Times VirtuAg webinar today – said he would be writing to his Chinese counterpart, as he urged against “running with emotions”.
“If Chinese officials have in fact made that representation … that is not in the spirit of WTO arrangements, that is greatly against it,” he said.
“So before we accuse anyone of anything, it’s important we try and have that dialogue and have clarification.”
Senator Birmingham urged China to rule out using any “discriminatory actions” against cotton producers.
“Impeding the ability of producers to compete on a level-playing field could constitute a potential breach of China’s international undertakings, which would be taken very seriously by Australia,” Mr Birmingham said.
“Our cotton exporters have worked hard to win contracts and establish themselves as reliable suppliers of high quality cotton in the Chinese market, which is an important input for many Chinese businesses.”
Australia is one of the world’s largest exporters of cotton with more than 90 per cent of production exported, about 65 per cent of which goes to China.
The three-biggest buyers are China, Indonesia and Thailand with South Korea, Japan, Taiwan, Pakistan and Italy also significant markets.
Cotton is the latest agriculture industry to become embroiled in diplomatic tensions between China and Australia, which some have blamed on Australia’s call for an inquiry into the origins of coronavirus.
In its statement, Cotton Australia said the Australian cotton industry had earned a reputation as a reliable international supplier of cotton with fast shipping times to export destinations and reliable delivery.
“Our crop is in strong demand internationally and can attract a price premium due to its high quality, excellent sustainability credentials, reliability and a proven track record in meeting manufacturer and consumer needs, including in China,” it said.
“Our industry’s relationship with China is of importance to us and is a relationship we have long valued and respected. To now learn of these changes for Australian cotton exports to China is disappointing, particularly after we have enjoyed such a mutually beneficial relationship with the country over many years.”
Cotton Australia said despite these changes to the industry’s export conditions they were confident “Australian cotton will find a home in the international market”.
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