1.585 million tonnes — that is the final tally for China's cotton imports in the 2025/26 season, a year-on-year surge of over 50%. Behind this figure lies a three-way tug-of-war between quota policy, price-spread arbitrage, and mill demand. Yet the more telling signal is not the total volume but the inflection point in the monthly curve: after peaking at 205,000 tonnes in January 2026, import momentum has steadily decayed, with August registering only 80,000 tonnes, down 12.1% month-on-month. The golden window for imported cotton is narrowing.
Quotas and Price Spreads: The Twin Engines
Authorities issued additional sliding-scale import quotas in August 2025 and March 2026, totalling 500,000 tonnes, opening a policy channel for import growth. But quotas alone are a necessary, not sufficient, condition. What truly drove mills to place orders was the price signal — the domestic-international cotton price spread remained wide for most of the year, giving imported cotton a clear cost-performance edge. Mills naturally tilted toward higher import ratios.
This logic left a distinct imprint on trade modes. Bonded supervision area imports grew 62.7% year-on-year, rising to a 40% share; customs special supervision zone logistics goods surged 89.1%, reaching 32%. Together they account for over 70% of the total, indicating that enterprises prefer the flexibility of bonded zones to allocate resources and avoid capital tie-up, rather than one-off customs clearance through general trade. General trade's share fell 5 percentage points to 18%, reflecting heightened sensitivity to cash flow and inventory turnover.
Origin Landscape: Brazil's Rise and Australia's Monthly Upset
On an annual basis, Brazilian cotton held first place with a 49% share, growing 68.2% year-on-year and gaining 5 percentage points. Supply stability and price competitiveness are its core advantages. Australian cotton ranked second at 26%, up 46.2%. US cotton fell 12.9% to just 9%, shedding 6 percentage points — the contraction of Sino-US cotton trade is now firmly established. A notable variable is Central Asian cotton from Kazakhstan and elsewhere, which grew 1.5-fold annually to a 5% share, becoming the fourth-largest source. Central Asian cotton's cost-performance is gaining recognition among more mills.
But the annual picture masks dramatic monthly shifts. In August, Australian cotton arrivals reached 60,000 tonnes, up 9.5% month-on-month, capturing over 70% of the monthly total and vaulting to the top source position. Australian cotton is primarily suited to high-end home textiles and combed fabric production, favoured by large and medium-sized mills. Brazilian cotton meanwhile plummeted to just 6,000 tonnes, down 66% month-on-month, with a mere 7% share. This monthly rotation of origins means mills are flexibly switching procurement direction based on order structure and arrival schedules, rather than locking into a single supply channel.
Price Transmission and Global Supply Tightening
The average import price rose to USD 1,911/tonne in August, up 3.4% month-on-month and 4.9% year-on-year. US production concerns and weather disruptions were the main drivers. US cotton quoted at USD 2,237/tonne, up 6.1% month-on-month, leading gains; Australian cotton at USD 1,933/tonne held firm; Brazilian cotton at USD 1,685/tonne saw limited upside. Changes in the spread structure directly affect mill cost calculations — when the US-Brazil spread widens, blending plans require recalibration.
A deeper variable comes from the global supply-demand balance sheet. Global cotton consumption for 2025/26 is projected at 26.373 million tonnes, with a stock-to-use ratio of 62.2%, already revised down from mid-year estimates. For 2026/27, production is forecast at 25.543 million tonnes against consumption of 26.763 million tonnes — a deficit of roughly 1.22 million tonnes — pushing the stock-to-use ratio down further to 56.8%. The tightening trend is clear.
Australia's production outlook is particularly stark. The Australian Bureau of Agricultural and Resource Economics and Sciences reports that 2026/27 Australian cotton output is expected at 679,000 tonnes, down 34% year-on-year, due to dry weather and reduced irrigation water supply. In 2025/26, Australia exported 1.217 million tonnes of cotton, with China as the largest buyer at 440,000 tonnes (36.1%), followed by Vietnam and India. Australia's production decline will directly compress China's import sources for premium cotton, constraining raw material supply for combed yarn and high-end home textile producers.
Downstream exports show divergence. August textile and apparel exports reached USD 28.57 billion, up 7.6% year-on-year but down 0.8% month-on-month. Textile exports were USD 12.69 billion, up 2.8% month-on-month, driven by autumn-winter order deliveries and overseas restocking; apparel exports were USD 15.88 billion, down 3.5% month-on-month, slower in pace. Cumulative January-August exports totalled USD 203.37 billion, up 3.1% year-on-year. The structural divergence — textiles outperforming apparel — means order resilience in fabrics and yarns exceeds that in finished garments, offering a direct reference for raw material procurement strategy.