China's cotton imports in May 2026 presented a rare combination: month-on-month volumes plummeted by nearly a third, yet year-on-year they more than doubled. Customs data show imports of 110,000 tons, down 31.7% from April but up 2.3 times from May 2025. Cumulative imports for the first five months reached 830,000 tons, a 90.7% increase. This contrast reflects the interplay of a low base, policy quota releases, and industry cycle dynamics.
Import Structure Reshuffles: Brazil Consolidates, US Rebounds
The import source mix saw significant adjustments in May. Brazilian cotton maintained its dominant position, with its share rising from about 55% in April to 58%. In contrast, Australian cotton's share contracted due to tight spot supply. US cotton, benefiting from concentrated rush orders for apparel exports to the US, saw its share jump 7 percentage points to 22%. Kazakhstan and Afghanistan accounted for 5% and 4%, respectively.
From a price perspective, rising international cotton prices were a key driver of structural changes. The average import price in May rose to $1,699 per ton, up 2.6% month-on-month. US cotton prices rose 7.6% to $1,856/ton, Australian cotton surged 8.3% to $1,948/ton, while Brazilian cotton only increased 2.1% to $1,615/ton. The widening price gap made Brazilian cotton more cost-effective, directly supporting its expanding market share.
Trade Patterns and Downstream Transmission: Bonded Channels Active, Mills Destock
Trade method data reveal the underlying logic of import pace changes. In May, bonded warehouse and supervised premises accounted for 45% of imports, while special customs supervision zones accounted for 43%, together totaling 88%—a notable increase from April. General trade plummeted to 7%, down 8 percentage points. This indicates that a large volume of imported cotton remains in bonded storage rather than entering processing, as mills prefer to draw down inventories rather than make spot purchases.
The core driver is the traditional off-season in downstream textiles. With insufficient new orders, mills rely on domestic stocks to maintain production, actively slowing foreign cotton purchases. Meanwhile, textile and apparel exports totaled $25.61 billion in May, up 6.5% month-on-month, but fabric exports fell 0.9%, signaling that overseas restocking has largely concluded. Only apparel exports grew 14.7% month-on-month due to concentrated summer garment shipments. This 'apparel strong, fabric weak' export structure further curbs immediate cotton demand.
Global Supply Tightens: Australian Crop Warning, Inventories Draw Down
The USDA June supply-demand report showed global 2025/26 ending stocks falling by over 131,000 tons, with the stocks-to-use ratio dropping to 64%. Although production edged up slightly, consumption declined more, and exports rose over 1%, tightening the supply-demand balance.
A more direct pressure came from the Australian Bureau of Agricultural and Resource Economics and Sciences report: due to water scarcity in eastern growing regions and below-average rainfall during the growing season, Australia's 2025/26 cotton output is forecast at 1 million tons, down 16% year-on-year, with planted area falling 12%. Although irrigated production support keeps output 20% above the 10-year average, the reduction signal is clear. Given that Australian cotton is a key raw material for China's high-end spinning mills, this supply contraction will directly push up import prices and may shift some orders to Brazilian or US cotton.