Turkey becomes No. 1 buyer of U.S. cotton

Market News

Turkey becomes No. 1 buyer of U.S. cotton

According to US data, Turkey has overtaken China as the biggest buyer of U.S. cotton, as Chinese buyers have boosted their purchases of lower-taxed yarn and cut back on buying raw cotton. Continuing a five-months-long trend since the August 1 start of the 2013/14 crop marketing season, data for the week to December 19 showed Turkey was the top buyer. It bought 83,400 bales of upland cotton, double that of China.

Turkey's renewed appetite for U.S. fiber has been a pocket of strength as U.S. traders and growers worry that a decision by Beijing to dismantle its three-year stockpiling program will erode foreign demand and hurt prices. Since the start of the season, Turkey has bought almost 1.72 million 480-lb bales of upland cotton, up more than 40 percent from the same period last year. That compares with 1.42 million bales booked by Chinese buyers during the same period, down more than 60 percent from last year. Other big buyers of U.S. cotton have been Mexico, Vietnam and Thailand.

The Turkish buying spree in part reflects a need to reach further afield for fiber as local supplies tighten on falling output, traders said. Turkey and Uzbekistan are expected to grow 600,000 fewer bales this year due to lower plantings. Turkey's consumption is expected to hit a 7-year high of 6.2 million bales this season while regional supplies fall, resulting in higher imports of cotton from the United States, Greece, Australia, etc.

Meanwhile, mills in China are lapping up the imported cotton in the market, in a bid to get better prices and quality of the raw material.