China's cotton imports climbed a steep curve in the 2025/26 season, reaching 1.585 million tonnes — a year-on-year increase of over 50%. Behind this figure lies not a simple demand rebound, but the interplay of quota policy, domestic-international price spreads, and a shifting global supply landscape. For textile enterprises, understanding why this curve rose and then flattened is more valuable than memorizing the total.
Quotas and Price Spreads: The Twin Engines
In August 2025 and March 2026, authorities released sliding-duty import quotas in two tranches totaling 500,000 tonnes, directly opening a window for mills' cotton needs. Meanwhile, the domestic-international price spread remained wide, making imported cotton's cost advantage hard to ignore. Quota supply and price signals worked in tandem to drive significant import expansion.
Monthly import volumes rose steadily early in the season, peaking at 205,000 tonnes in January 2026. During this phase, restocking appetite was strong, and imported cotton became a key option for balancing raw material costs. After the peak, however, volumes gradually declined, with August imports falling to 80,000 tonnes, down 12.1% month-on-month.
The logic behind the fading momentum is straightforward. The domestic textile market entered its off-season, pushing mills toward hand-to-mouth purchasing. Central reserve cotton auctions continued, offering an alternative channel for mills with insufficient quotas. Rising international prices narrowed the spread, eroding imported cotton's appeal. Together, these three factors significantly slowed the import pace compared to the first half.
Supplier Landscape: Brazil Holds Top Spot, Australia Gains Late
For the full year, Brazilian cotton held the top supplier position with a 49% share, up 5 percentage points year-on-year, with import volumes growing 68.2%. Stable supply and cost-effectiveness made it a baseline choice for domestic mills. Australian cotton ranked second with a 26% share, up 46.2% in volume, maintaining strong suitability for high-end home textiles and combed fabrics.
US cotton moved in the opposite direction, with imports falling 12.9% and its share dropping 6 percentage points to 9%. Kazakhstan and other Central Asian origins emerged as a highlight, with imports surging 1.5 times and share rising to 5%, becoming the fourth-largest source. This shift signals that import diversification is moving from trend to reality.
August's monthly data better reflects the structural switch: Australian cotton arrivals reached 60,000 tonnes, up 9.5% month-on-month, accounting for over 70% of the month's total and becoming the top source. Brazilian cotton fell to 6,000 tonnes, down 66% month-on-month. Such sharp monthly swings remind buyers to monitor shipping schedules and arrival timing to avoid raw material inventory disruptions.
Trade Modes and Prices: Bonded Channels Dominate, Costs Rise
Structural changes in trade modes also deserve attention. In 2025/26, imports via bonded supervision sites grew 62.7%, accounting for 40% and ranking first; customs special supervision zone logistics goods grew 89.1%, accounting for 32%. Together, these two channels exceeded 70% of the total, reflecting enterprises' preference for bonded channels to flexibly manage inventory and capital occupation.
General trade's share fell to 18%, while processing trade with imported materials dropped to 10%. In August, processing trade with imported materials grew 69.2% month-on-month; though from a low base, it hints that some processors may be stocking up ahead of future orders.
On pricing, the average import cost rose to $1,911/tonne in August, up 3.4% month-on-month and 4.9% year-on-year. US cotton led gains at $2,237/tonne amid production cut expectations and weather disruptions; Australian cotton held firm at $1,933/tonne; Brazilian cotton lagged at $1,685/tonne. Rising import costs are squeezing mill margins.
Downstream Export Divergence and Tightening Global Supply
August textile and apparel exports showed divergence: textile exports reached $12.69 billion, up 2.8% month-on-month, driven by autumn-winter order deliveries and overseas restocking; apparel exports fell 3.5% month-on-month to $15.88 billion. Cumulative exports for January-August reached $203.37 billion, up 3.1% year-on-year. Textiles outperforming apparel suggests better order resilience in upstream yarn and fabric segments.
Globally, USDA September data shows 2025/26 global cotton consumption at 26.373 million tonnes, with an ending stocks-to-use ratio of 62.2%, revised down from mid-year estimates. For 2026/27, production is projected at 25.543 million tonnes against consumption of 26.763 million tonnes, pushing the stocks-to-use ratio down to 56.8% — a continued tightening.
Australia's production cut is particularly notable. In 2025/26, Australian cotton exports totaled about 1.217 million tonnes, with China as the largest importer at 36.1%. But ABARES projects 2026/27 Australian output at just 679,000 tonnes, down 34% year-on-year, due to dry weather and reduced irrigation water. This means mills relying on Australian cotton for high-end home textiles and combed fabrics need to secure alternative resources early.