China plans to source cotton from India

With only a month left before the phasing out of quota, China is expected to source over 300 tonne of cotton yarn and cotton fabric from India in the next few months. China has already placed an order 80 tonne of on a trial basis.

Recently, representatives from the Chinese ministry of textile had visited India to access the country's market and study the possibility of importing cotton from India. Till now China was sourcing cotton from Pakistan.

"At present we are placed an order of over 80 tonne on trial basis and if found suitable to our requirements, we will place an order of exceeding 300 tonne of cotton from India in the next few months," said Denny Ng of Hojet Industries Ltd and member of the Chinese delegation in India. "Indian cotton can be good for our country."

The Chinese delegation's visit follows a similar visit by an Indian delegation.

The Indian team had gone to China for seeking the opportunities of trade between the two countries with phasing out of quotas.

"We have even placed order for reactive dyes and chemicals for 16 tonne. If found suitable we will enhance the order. Indian reactive dyes are better and cost effective and we are exploring the opportunities of exporting dye intermediaries to India," said Zhao Jian Sheng of Changshu Sun Kam Kwong Printing and Dyeing.

"We are facilitating the textile delegation coming from various countries to tie up with Indian firms to source their requirements in view of the quashing of the quota regime from January 2005. Last month, a Canadian textile delegation visited the country and has signed four memorandum of understandings (MoUs) with Indian textile units to supply bed sheets, pillow covers," S P Verma, deputy director, regional office of the textile commissioner told Business Standard.

Textile delegations from Australia and New Zealand are expected to arrive early next month to form joint venture with Indian units. The Chinese delegation's visit will boost the business of both countries," he added.

"With the abundant monsoon in almost all parts of Gujarat, Maharastra and Andra Pradesh, all the three states experienced a bumper cotton crop in the this year. The bumper crop may pose serious challenges to manage. A sudden increase in the supply of cotton output will lead to crashing price of cotton.

"The bulk export order will help check the price crash and will earn foreign exchange for the country," said Jagat Shah, chief executive officer, Global Network, the agency which co-ordinated the Chinese delegation's visit.