China US Trade Relations Tending To Ease, China Cancels 4-5 Billion USD India Cotton Yarn Order

Affected by the Sino US trade war, China's demand for India's cotton yarn increased, and the export of India's cotton yarn increased sharply from June 2018 to November.

However, with the suspension of further tariffs between China and the United States, China has begun renegotiation and cancelling about 4-5 billion US dollars (about 10-12 contracts) of India cotton yarn import orders in recent weeks.

According to India industry sources, recently, Chinese importers, agents and banks began to renegotiate or cancel the India cotton yarn contract signed earlier and stop issuing the letter of credit, and no reason was given, which caused India cotton yarn export to be in trouble.

In 2018 4-11, the export volume of India's cotton yarn to China was US $892 million 400 thousand, an increase of 2.5% compared with the US $870 million 200 thousand in the same period of 2017/18.

According to India's analysis, China's cancellation of orders is affected by the easing of trade relations between China and the United States. China may be worried that the United States will impose tariffs on all Chinese products starting in March, so it may reduce the tariff of 25% on the US cotton trade after March 1st.

Recently, China's imports of cotton yarn in India are decreasing.