In May 2026, China imported approximately 110,000 tons of cotton, a month-on-month decline of 35% but a year-on-year surge of 214.7%. While the monthly fluctuation appears sharp, the cumulative figure for January-May stands at 830,000 tons, up nearly 90% year-on-year. This data reveals a structural rebalancing in the global cotton supply chain, driven by price differentials, policy shifts, and downstream demand.
The Logic Behind the Data
Three critical timeframes emerge from the customs data. First, the single-month figure of 110,000 tons for May, though lower than April's peak, remains high in a five-year context. Second, the January-May cumulative of 830,000 tons indicates a substantial increase in reliance on foreign cotton. Third, the 2025/26 season (September 2025 to May 2026) saw 1.33 million tons imported, up 44.6% year-on-year, confirming a structural trend rather than short-term restocking.
The month-on-month decline is primarily due to the digestion of concentrated arrivals in April, which exceeded 170,000 tons. The 214.7% year-on-year jump reflects an extremely low base in May 2025, when domestic prices were inverted against international benchmarks.
Impact on Industrial Clusters
This import wave has divergent effects on domestic cotton regions. In Xinjiang, where production remains around 5.1 million tons, imported cotton is squeezing the competitiveness of Xinjiang cotton in low-to-mid count yarns. Mills in Shandong and Henan report that the price gap between imported and Xinjiang cotton has narrowed from 500 yuan per ton to just 200 yuan, with some specifications even inverting.
For downstream weaving hubs like Shengze, Keqiao, and Nantong, the cost advantage of imported cotton is reshaping procurement strategies. Mills are increasingly favoring high-count yarns made from U.S. or Brazilian cotton, which offer better consistency and lower impurity rates for premium garment brands. This has created a 'hot external, cold domestic' market, where imported cotton trades actively while Xinjiang cotton warehouse receipts see slower cancellations.
Price Expectations and Cost Management
For export-oriented garment firms, the rising ICE cotton futures—from 72 to 82 cents per pound in the first half of 2026—have direct cost implications. Cotton accounts for 25%-35% of total garment production costs, meaning every 10-cent increase adds $0.3-$0.5 to the cost of a basic cotton T-shirt.
With January-May imports already consuming 46% of the expected annual quota (around 1.8 million tons), the remaining quota for the second half is limited. Firms may need to rely on processing trade schemes or shift to domestic cotton, both of which affect pricing flexibility in export orders.