China has told cotton mills to stop buying supplies from Australia, Reuters reports, citing an Australian government source and two China-based cotton traders briefed on the matter. China is the biggest buyer of Australian cotton, which is considered the highest quality of all import origins. In 2018-19, China purchased around $637 million worth of the fiber from Australia, with the country shipping 400,000 MT of cotton to China in 2019.
“The millers essentially get a quota they can import, and essentially they're being told they might not get their quota next year if they buy our cotton,” an Australian government source briefed by Australian officials in China told Reuters.
One Reuters trade source speculated Chinese firms could still use Australian cotton at their mills in Vietnam, with China likely to source more top-grade cotton from Brazil and West Africa.
This is just the latest in a series of Chinese retaliatory moves against Australia who has been critical of Chinese policy and is seeking an independent inquiry over the origins of Covid-19. This comes just days after reports China had halted coal purchases from Australia and was launching anti-dumping/anti-subsidies probes into imports of Aussie wine. Earlier this year, China also essentially banned Aussie barley imports and limited beef shipments from the country.