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  • 6.2.7-MARKET PROFILES-RECOMMENDATIONS FOR LDC COTTON EXPORTERS FOR PENETRATING THE CHINESE MARKET

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  • Recommendations for LDC cotton exporters for penetrating the Chinese market

    Chapter 6 - Market profiles - China 

     
     
    With the increase in imported cotton consumed by Chinese textile mills, more and more African cotton has entered China. It did, however, take some time for Chinese textile enterprises to accept African cotton. Chinese textile mills generally perceive African cotton to be of good quality at a comparatively low price. It is suggested that for African cotton, organized and large-scale marketing should be carried out in China. Standards of African cotton need to be made uniform, and the transaction mode of depending purely on samples for export should be changed. Additionally, efforts should be made to tighten management of the cotton ginning process to avoid the problem of ‘three thread’ (chemical fibre, hemp thread and hair) and mixed grades.

    The consignment method of trading is well accepted by Chinese textile enterprises and should be adopted where possible. In China, bonded consignment has become one of the important modes in cotton import, and has been undertaken by almost all big international cotton traders.

    Before entering the Chinese market, exporters need to make sure they understand China’s macro control policies for cotton. Currently, China’s cotton policy is following a market mechanism under the Government’s macro control, including State reserve, tariff-rate quotas and policy loans. Market control has an important influence over China’s cotton price and even the world’s cotton price. Therefore, it is extremely important to well understand China’s relevant cotton policy so as to understand desired market direction.

    In recent years, the Chinese Government has paid much attention to helping African LDCs enter into China’s market. Each year, the Ministry of Commerce holds several seminars or training programmes especially for African LDCs, to guide them on how to gain access to China’s big market. Cotton typically plays a very import part in such seminars or programmes.

    Every two years, there is an International Cotton Conference jointly hosted by the Ministry of Agriculture, FAL and CNCE. This very large cotton event attracts nearly a thousand participants from the cotton industry all over the world. African cotton-producing countries can also take advantage of this opportunity in accessing China’s large cotton market.