The erosion of cotton's cost advantage and the contraction of downstream orders are jointly reshaping the raw material procurement rhythm of China's cotton textile industry. In May 2026, China imported 110,000 tons of cotton, a sharp month-on-month drop of 31.7%, but still a 2.3-fold increase year-on-year. Behind this seemingly contradictory data lies the combined effect of rising international cotton prices, weak domestic off-season demand, and the gradual implementation of quota policies.
Import Pace Slows: Squeezed by Costs and Demand
The core driver of the sharp month-on-month decline is twofold. First, international cotton prices continued to climb in the previous period—the average import price in May had risen to $1,699 per ton, up 2.6% month-on-month. US and Australian cotton saw particularly notable increases, rising 7.6% and 8.3% respectively, directly weakening the cost-effectiveness of foreign cotton relative to domestic cotton. Second, the textile industry has entered the traditional off-season, with insufficient new orders; most mills are relying on domestic inventory digestion and have actively slowed foreign cotton purchases. Customs data also show that cumulative imports in the first five months reached 830,000 tons, up 90.7% year-on-year; cumulative imports in the first nine months of the 2025/26 season were 1.305 million tons, up 45% year-on-year, indicating that the annual total is still running at a high level, but monthly fluctuations have begun to reflect changes in market sentiment.
Source Country Pattern: Brazil Holds Firm, US Cotton Rebounds on Orders
From the perspective of import sources, Brazilian cotton remains firmly in the top spot, with its share rising to 58% in May. US cotton's share jumped 7 percentage points month-on-month to 22%, returning to a high for the year. This change does not stem from US cotton's own price competitiveness—its average price of $1,856/ton is still higher than Brazil's $1,615/ton—but is driven by the concentrated rush of garment orders to the US. Australian cotton saw a significant decline in share due to insufficient spot supply. Kazakhstan and Afghanistan accounted for 5% and 4% respectively. In terms of trade methods, the proportion of goods entering and leaving bonded supervision sites remained the highest (45%), while the share of goods in special customs supervision zones rose to 43%, and the share of general trade fell sharply to 7%, reflecting that companies prefer to use bonded channels to flexibly manage raw material inventory.
Downstream Transmission: The Divergence of Strong Apparel and Weak Fabrics
May's textile and apparel export data further confirms the uneven heating and cooling of the industrial chain. Total exports for the month were $25.61 billion, up 6.5% month-on-month but down 2.3% year-on-year. Among them, apparel exports were $13.02 billion, a significant month-on-month increase of 14.7%, mainly due to the concentrated delivery of overseas summer clothing orders; while textile exports were $12.59 billion, a slight month-on-month decrease of 0.9%, indicating that the peak period for fabric restocking has passed. This structure of 'apparel replenishment, fabric destocking' means that the purchasing momentum for upstream yarn and grey fabric links is unlikely to recover in the short term, and cotton textile companies need to be wary of the risk of raw material inventory accumulation.
Global Supply Tightens: Australian Production Cuts and Falling Stocks-to-Use Ratio
On the supply side, the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) June report lowered its 2025/26 Australian cotton production estimate to 1 million tons, a year-on-year decrease of 16%, with planted area also down 12% year-on-year. The main causes are tight irrigation water resources in the eastern main producing areas and below-average rainfall during the growing season. However, stable production supported by irrigation still keeps output 20% above the ten-year average. Meanwhile, the USDA's June supply and demand report shows that global cotton exports were revised up by over 1%, while ending stocks were significantly revised down by over 131,000 tons, bringing the stocks-to-use ratio down to 64%. This suggests that the global cotton market is transitioning from loose to tight balance, and future import cotton prices may receive stronger support.