| NEW YORK
NEW YORK Dec 27 Turkey has overtaken China as
the biggest buyer of U.S. cotton, U.S. data showed on Friday, 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 Aug. 1 start
of the 2013/14 crop marketing season, data for the week to Dec.
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, reported on Friday, 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, boosting
its appetite for fiber from the United States, Greece and
Australia, according to traders.
Traders and market sources said the increased demand for
cotton is also due to a resurgence in the Turkish textile
industry, which is selling more textiles and apparel to Europe
even as demand remains sluggish due to the slow economic
Turkey's mills and garment producers are making "inroads" in
Europe due to their close proximity to consumers as Asian rivals
switch their focus to the Far East, said Peter Egli, director of
risk management for British-based merchant Plexus Cotton Ltd.
Mills in Pakistan, India and Bangladesh have increased
production of yarn, a semi-finished product, for sales to China.
Asian producers are also under increasing scrutiny in Europe
and the United States after a string of deadly incidents in
Turkey's textile industry is still a fraction the size of
China's, whose mills are expected to consume about 36 million
bales this season. China's pace of buying is expected to pick
up in the second half of the marketing year.
China's purchases are expected to shrink more than half this
season as the country's struggling textile mills try to work
around high domestic fiber prices by importing yarn, which can
be imported at a lower duty rate.
Turkey has been the No. 2 buyer of U.S. cotton in recent
years. The United States is the world's No. 1 exporter.
At the current pace, U.S. cotton would fulfill Turkey's
entire import needs for the market year, based on USDA
estimates. The U.S. government has pegged Turkish imports at 4.1
million bales, the highest in four years.
"Business is good. The mills are running high, and there is
good demand for yarn, fabric and finished garments in Europe,"
said one Turkish trader.
(Reporting by Chris Prentice; Editing by Dan Grebler)