China's cotton imports in May 2026 dropped 31.7% month-on-month to 110,000 tons, reflecting the dual pressure of off-season effects and high international cotton prices. Customs data shows a 2.3-fold year-on-year surge due to a low base and quota implementation. Total imports in the first five months reached 830,000 tons, up 90.7% year-on-year.
Import Structure Reshaped: Brazil Dominates, US Cotton Rebounds on Orders
Brazilian cotton maintained its top position, with its share rising to 58%, supported by price advantages and stable supply. US cotton share increased by 7 percentage points to 22%, driven by rush orders for apparel exports to the US. Australian cotton share declined due to tight spot supply. Kazakhstan and Afghanistan accounted for 5% and 4%, respectively.
In terms of trade modes, bonded warehouse imports remained the largest at 45%, up 2 percentage points; special customs supervision zone logistics accounted for 43%, up 6 points; general trade fell to 7%, down 8 points. This indicates that imported cotton mainly flows through bonded channels, allowing flexible inventory management.
Price Transmission: Higher International Prices Weigh on Purchasing
Average import price rose 2.6% month-on-month to $1,699/ton, down 11.9% year-on-year. Brazilian cotton averaged $1,615/ton, US cotton $1,856/ton, and Australian cotton $1,948/ton. Australian cotton saw the largest increase at 8.3% due to supply constraints. Higher international prices eroded cost advantages, prompting mills to rely on domestic stocks amid weak downstream demand.
Export Divergence: Apparel Strengthens, Fabrics Weaken
Textile and apparel exports grew 6.5% month-on-month to $25.61 billion in May, but fell 2.3% year-on-year. Apparel exports rose 14.7% month-on-month to $13.02 billion, driven by summer orders; textile exports fell 0.9% month-on-month to $12.59 billion. The divergence reflects a 'cold upstream, warm downstream' pattern, where apparel demand supports cotton consumption but fabric weakness limits intermediate demand.
Global Supply-Demand Adjustment: Australian Cotton Output Drops
The USDA June report shows a slight increase in global production and a decrease in consumption, with ending stocks down over 131,000 tons. ABARES cut Australia's 2025/26 cotton output estimate to 1 million tons, down 16% year-on-year, due to irrigation water shortages and low rainfall. Despite this, output is still 20% above the 10-year average. The reduction in high-grade Australian cotton will tighten supply and likely push international prices higher.