On March 9, the National Reform Commission issued an announcement that the first batch of cotton import sliding tax quotas for 2022 will be issued in the near future. The quantity is 400,000 tons, all of which are non-state trade quotas and are limited to imports through processing trade. Applicant companies must also qualify as cotton spinning companies with spinning equipment (self-owned) of 50,000 spindles or more or companies with an annual production capacity of cotton spunlace nonwovens (self-owned) of 8,000 tons or more.
It is worth noting that the quantities of cotton import quotas with sliding quasi-tariffs from 2019 to 2021 are 800,000 tons, 400,000 tons, and 700,000 tons respectively. However, in 2019, applicants are limited to 50,000 spindles of spinning equipment (self-owned). For cotton spinning enterprises and above, the sliding quasi-tariff quota has nothing to do with weaving enterprises. Starting from 2020, cotton spinning enterprises with 50,000 spindles and above, and cotton spunlace nonwovens with an annual production capacity (self-owned) of 8,000 tons and above are eligible to apply for allocation. The proportion of cotton spinning enterprises has declined significantly.
How to understand the cotton import sliding tax quota policy in 2022? The industry summarizes the following points: First, it is early. Compared with September 1, 2020, and April 30, 2021, this year’s news release is more than one and a half months ahead of schedule; second, it lays the “foreshadowing” for the later issuance of sliding tax quotas. The announcement clarified that this 400,000 tons of processing trade is the “first batch” in 2022. As long as the market needs it in the second half of 2022, it is entirely possible that a second batch or a third batch of quotas will be issued; thirdly, the first batch of sliding tariff quotas has played a role in “prescribing the right medicine to the case”. ” role. Since 2022, due to the tightening of bans on imported Xinjiang-related products by the United States and Europe, some export-oriented companies have a demand for imported cotton. The issuance of an additional 400,000 tons of processing trade quotas will help cotton textile companies reduce costs and improve export competitiveness; fourth, there will still be a special textile session , keeping cotton traders, speculators, etc. out of the threshold, sliding quasi-tariff quotas directly to the demand end, avoiding intermediate links; fifth, the impact on the domestic futures market is minimal. On the one hand, this sliding tax quota is “fixed-point release”; on the other hand, the total quota is only 400,000 tons and will be used within the past nine months or so, which will minimize the impact on the weak cotton market.
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