Market Observation: Tariff Factors Lead To Subsequent Increase Of Southeast Asian Countries Signing US Cotton Contracts

According to the statistics of USDA Cotton Export Weekly Report, as of April 10, 2025, the cumulative contracted export of American cotton in 2024/25 was 2.527 million tons (including Pima cotton), exceeding the annual cotton export target of 154000 tons predicted by USDA (USDA report estimated that the export of American cotton in this year was 2.373 million tons, which was not adjusted for two consecutive months), and the contracted progress reached 106.5%. Among them, Vietnam, Pakistan, Turkey, mainland China, Mexico, Bangladesh and India accounted for 22.8%, 20.2%, 14%, 6.6%, 5.8%, 5.0% and 4.6% respectively.

According to the report, in the past more than a month, Bangladesh and India have recovered slightly from the 2024/25 US cotton contract, and the gap between their share and that of mainland China has continued to narrow. As of April 10, China has shipped 155000 tons of American cotton in 2024/25, accounting for 92.4% of the total contracted volume. Therefore, the number of American cotton contracts that Chinese buyers can cancel and postpone from April to May is expected to be very small.

Considering that since 2025, the United States has imposed an additional tariff of 145% on imports of Chinese goods, while China has imposed an additional tariff of 125% on imports of American cotton goods, which has hindered China's direct export of American cotton products (traceability orders, including unperformed contracts and planned new purchases), while American cotton exports to the Chinese market have been rapidly "frozen", most international cotton merchants The quotation and sales focus of American cotton export enterprises shifted to Vietnam, India, Pakistan, Bangladesh and other Southeast Asian countries. It is judged that the signing and purchase of American cotton by Southeast Asian countries from April to August still have a large growth space.

On the one hand, in order to reach a tariff agreement with the Trump government as soon as possible (Vietnam has reduced the tariff to zero), Vietnam, India, Pakistan and other countries will purchase a large amount of agricultural products and energy from the United States, and cotton import is one of the focuses, which is also a chip for Southeast Asian countries to narrow their trade surplus with the United States (according to rumors, Vietnam and Pakistan have promised to increase American cotton imports); On the other hand, as India and Pakistan enter the later period of the year, the supply gap caused by the significant reduction of cotton in 2024/25 is gradually reflected, which can only be solved by purchasing American cotton, Brazilian cotton, Australian cotton, etc; The Indian textile sector requires the Indian government to cancel or suspend the 11% tariff on fine wool cotton imports, which will stimulate the import of foreign cotton.

It should be noted that Vietnam, Malaysia, Singapore, Indonesia and other Southeast Asian countries have recently increased their control of "entrepot trade", which is conducive to the export of cotton products from Southeast Asian countries to the United States and the European Union as well as the growth of imported cotton consumption.