May's cotton import data reveals a clear divergence: total imports plunged 31.7% month-on-month, yet still surged 2.3 times year-on-year. This contrast reflects a tug-of-war among rising international cotton prices, weak domestic off-season demand, and the rollout of tariff-rate quota policies.
Import Landscape Reshaped: US Cotton Rebounds, Australian Supply Tightens
Customs data shows China imported 110,000 tons of cotton in May, down 31.7% month-on-month but up 2.3 times year-on-year. In the first five months of 2026, cumulative imports reached 830,000 tons, up 90.7% year-on-year. The sharp month-on-month decline is primarily due to two factors: rising international cotton prices that eroded the cost advantage of foreign cotton, and the onset of the traditional off-season in downstream textiles, where insufficient new orders led mills to rely on domestic inventories and slow down foreign cotton purchasing.
Looking at origin country structure, Brazilian cotton remained the top source, with its share rising from about 55% in April to 58%, further strengthening its dominant position. The most notable shift was the strong rebound of US cotton, whose share increased by 7 percentage points to 22%, driven by rush orders for apparel exports to the US. Australian cotton saw its share decline due to tight spot supply. Kazakhstan and Afghanistan accounted for 5% and 4% respectively, with relatively stable shares.
The average import price rose to $1,699 per ton in May, up 2.6% month-on-month but down 11.9% year-on-year. Brazilian cotton averaged $1,615/ton, up 2.1% month-on-month and down 6% year-on-year; US cotton averaged $1,856/ton, up 7.6% month-on-month and down 7.9% year-on-year; Australian cotton averaged $1,948/ton, up 8.3% month-on-month and up 7.3% year-on-year. Australian cotton's largest price increase is directly linked to its supply tightness.
Global Supply-Demand Tightens: Australia's Output Drops 16%, Ending Stocks Fall Sharply
The USDA's June global cotton supply-demand report shows that for the 2025/26 season, global production increased slightly by 3,300 tons, consumption decreased by 5,400 tons, exports rose by over 1%, and ending stocks fell sharply by more than 131,000 tons, with the stocks-to-use ratio dropping to 64%. The decline in ending stocks mainly came from increased exports from Brazil, the US, Kazakhstan, and Turkey.
Australia's production cut is the most impactful variable in this adjustment. ABARES' June report lowered its 2025/26 Australian cotton output estimate to 1 million tons, a 16% year-on-year decrease. Planted area fell to 6.825 million mu, down 12% year-on-year. The main causes were tight irrigation water resources and below-average rainfall in eastern growing regions. Although irrigated production still keeps output 20% above the 10-year average, a 16% year-on-year decline has a material impact on global high-grade cotton supply.
For buyers, Australia's production cut means the supply premium for high-grade cotton will further strengthen. In May, Australian cotton already traded at a 20.6% premium over Brazilian cotton, a spread that may widen further amid the production cut.
Textile and Apparel Exports: Apparel Season Shipments Surge, Fabric Restocking Fades
May's textile and apparel exports reached $25.61 billion, down 2.3% year-on-year but up 6.5% month-on-month. Apparel exports were $13.02 billion, up 14.7% month-on-month and down 4.1% year-on-year; textile exports were $12.59 billion, down 0.3% year-on-year and 0.9% month-on-month. Cumulative exports in the first five months of 2026 totaled $116.74 billion, roughly flat year-on-year.
The strong month-on-month growth in apparel exports was mainly driven by concentrated shipments of summer orders, which aligns with the logic behind the US cotton share increase. The slight month-on-month decline in textile exports indicates that overseas fabric restocking has largely concluded, with limited downstream replenishment momentum. This structural divergence between strong apparel and weak fabric suggests that inventory pressure is shifting from upstream cotton to midstream fabric.