Behind the 214% Surge in May Cotton Imports: The Dual Logic of Inventory Cycles and Policy Games

The arrival volume of imported cotton hit another industry expectation in May. According to data from the General Administration of Customs, China imported approximately 110,000 tons of cotton in May 2026, a staggering 214.7% year-on-year increase, but a 35% month-on-month decline of about 60,000 tons. Cumulative imports from January to May reached 830,000 tons, up 89.9% year-on-year. For the first nine months of the 2025/26 season (September 2025 to May 2026), total imports stood at approximately 1.33 million tons, a 44.6% increase year-on-year.

The contrasting signals in this data set are worth examining: the year-on-year surge indicates strong import momentum remains, while the month-on-month decline suggests the peak of phased inventory replenishment has passed. For the textile industry chain, fluctuations in import pace are becoming a key variable affecting domestic cotton price trends.

The Underlying Logic of the Import Surge

The 214% year-on-year increase is no accident. The base period in 2025 was extremely low—international cotton prices were high at the time, coupled with a tight quota release schedule domestically, leading to weak purchasing willingness among mills. Entering 2026, the price spread between domestic and international cotton has remained inverted, with imported cotton roughly 1,500-2,000 yuan per ton cheaper than Xinjiang cotton, directly stimulating purchasing enthusiasm from traders and textile factories.

A deeper reason lies in the industry's anticipation of domestic supply. The National Cotton Market Monitoring System previously estimated a 5%-8% reduction in domestic cotton production for the 2025/26 season, while textile end-order demand did not show significant contraction in the first quarter of 2026. To lock in low-cost raw materials, companies chose to import early using quotas, thus pushing up the cumulative arrival volume in the first five months.

The 35% month-on-month decline in May reflects the quota utilization entering a plateau phase. After a large volume of sliding-scale tariff quotas released early in the year cleared customs in March and April, remaining quotas became limited, prompting companies to slow down purchasing. Additionally, a slight rebound in international cotton prices in late May curbed some speculative imports.

Industry Impact: Price Game Under Supply Ease

From a supply-demand balance perspective, the 830,000 tons imported in the first five months already accounts for over 60% of total imports in 2025. If the monthly import pace remains at 80,000-100,000 tons in the second half of the year, total imports in 2026 will easily exceed 1.6 million tons, setting a five-year high.

This puts continuous pressure on domestic cotton prices. Currently, spot prices for Xinjiang cotton hover around 15,500-15,800 yuan per ton, while the port delivery price for imported cotton is around 14,000 yuan per ton. This price gap incentivizes textile mills to favor imported cotton, significantly slowing the sales progress of Xinjiang cotton. Cotton processing enterprises face dual pressures of inventory backlog and capital turnover, and some ginning factories have begun to lower their seed cotton purchase expectations.

For textile enterprises, lower raw material costs are generally beneficial, but the rapid import pace disrupts normal purchasing cycles. Some companies locked in large volumes of imported cotton orders below 14,000 yuan per ton early on, but now face rising storage costs and difficulty in passing on costs to downstream orders. More concerning is that if international cotton prices fall further due to new crop arrivals in the fourth quarter, current high-priced inventories could face depreciation risks.

Practical Recommendations

For Buyers - With the price spread between imported cotton and Xinjiang cotton still wide, prioritize using imported cotton quotas, but limit single purchases to 1.5 times monthly consumption to avoid storage pressure from concentrated arrivals. - Monitor changes in the domestic-international price spread after new cotton hits the market in September. If the spread narrows to within 1,000 yuan per ton, gradually increase the proportion of Xinjiang cotton purchases to reduce transportation and quota costs. - Use futures tools to hedge inventory risk. After imported cotton arrives, sell an equivalent volume of hedging positions on the Zhengzhou Cotton Futures main contract simultaneously to lock in processing margins.

For Foreign Trade Companies - When quoting for export orders, shorten the raw material price lock-in period to within 30 days. The volatility of imported cotton prices has increased, and long-term contracts are prone to losses from raw material price rises. - Keep an eye on cotton import dynamics in Southeast Asian textile countries. India and Vietnam are also heavily purchasing low-cost imported cotton. If their cotton yarn prices drop further, the export competitiveness of Chinese cotton yarn will be impacted. - Negotiate floating pricing mechanisms with foreign clients, using the cotton futures price index as the adjustment benchmark to avoid bearing raw material fluctuation risks unilaterally.