Source: Brendon Thorne | Bloomberg | Getty Images

SINGAPORE (CNBC) — Australia wants dialogue with China to resolve their trade dispute and clear up any misunderstandings with its largest trading partner, Australian agriculture minister David Littleproud told CNBC Friday.

Two Australian cotton industry groups said China has started discouraging its spinning mills from using cotton imported from Down Under.

“It has become clear to our industry that the National Development Reform Commission in China has recently been discouraging their country’s spinning mills from using Australian cotton,” Adam Kay, CEO of Cotton Australia, and Michael O’Rielley, chair of Australian Cotton Shippers Association, said in a statement.

Littleproud told CNBC’s Will Koulouris that he will be writing to his counterpart in China to get clarity on the situation.

“I think it’s important we get clarification before we jump the gun on this. That’s why we are working with the industry and Beijing to make sure we get some answers,” he said.

Key points to recap:

Two Australian cotton industry groups said that China has started discouraging its spinning mills from using cotton imported from Down Under.
Cotton is the latest agricultural product getting caught in the middle of tensions between Beijing and Canberra after the latter supported a growing call earlier this year for an international inquiry into China’s handling of the coronavirus pandemic.
China took a number of measures against Australian exporters in 2020: that incudes anti-dumping and anti-subsidy duties on Australian barley and reportedly giving state-owned utilities and steel mills verbal notice to stop importing Australian coal.

[BREAKING] Australia is Ready to Talk to China About Their Trade Dispute