In May 2026, China's cotton import market showed a clear divergence: import volume plunged over 30% month-on-month, yet still surged 2.3 times year-on-year. Behind this contrast lies the dual pressure from rising international cotton prices and weakening downstream textile demand during the off-season. For buyers, the slowdown in raw material replenishment signals an intensifying supply-demand tug-of-war in the short term.
Import Volume Drops Month-on-Month Under Cost and Order Pressures
According to customs data, China imported 110,000 tons of cotton in May, a 31.7% drop month-on-month. This decline is not isolated—earlier sharp rises in international cotton prices eroded the cost advantage of foreign cotton. The average import price in May rose to $1,699 per ton, up 2.6% month-on-month. US cotton averaged $1,856/ton (up 7.6%), and Australian cotton averaged $1,948/ton (up 8.3%). For textile mills that prioritize price elasticity, foreign cotton has become less cost-effective.
Meanwhile, the downstream textile market entered its traditional off-season with insufficient new orders. Mills relied more on domestic inventories, deliberately slowing foreign cotton purchases. This explains the month-on-month decline, while the year-on-year surge was supported by a low base last year and the gradual rollout of additional sliding-duty quotas.
Brazilian Cotton Dominates, US Cotton Rebounds on Order Rush
By source, Brazilian cotton remained the top supplier, with its share rising to 58% in May. This reflects its long-term advantages in price and supply stability. Australian cotton saw its share decline due to tight spot supply. Notably, US cotton's share increased by 7 percentage points to 22%, a significant rebound.
This shift was driven by concentrated production of apparel orders for the US market. Some foreign trade companies accelerated US cotton purchases to meet delivery deadlines before potential tariff or policy changes. However, this is a short-term spike, not a sign of long-term competitiveness recovery for US cotton in China. Buyers should be cautious of such order-driven fluctuations and avoid over-concentration on a single source.
Average Import Price Rises Amid Global Supply-Demand Adjustments
The average import price in May rose 2.6% month-on-month but fell 11.9% year-on-year. By country, Brazilian cotton averaged $1,615/ton (up 2.1% month-on-month, down 6% year-on-year); Australian cotton averaged $1,948/ton (up 8.3% month-on-month and 7.3% year-on-year); US cotton averaged $1,856/ton (up 7.6% month-on-month, down 7.9% year-on-year). These price divergences reflect different supply-demand dynamics: Australian cotton output is forecast to drop 16% year-on-year due to drought in the eastern growing regions, supporting high prices; US cotton faces price pressure amid rising global export volumes.
The USDA's June supply-demand report showed a slight increase in 2025/26 global cotton output, a decrease in consumption, and a significant drawdown in ending stocks. ABARES lowered its Australian cotton output estimate to 1 million tons, down 16% year-on-year, though still 20% above the 10-year average. This suggests that while short-term supply is tight, long-term production resilience remains.
Textile and Apparel Exports Grow Month-on-Month, Fabric Segment Weakens
In May, China's textile and apparel exports reached $25.61 billion, up 6.5% month-on-month but down 2.3% year-on-year. Apparel exports were $13.02 billion (up 14.7% month-on-month), driven by concentrated shipments of summer orders. However, textile exports (including fabrics) were $12.59 billion, down 0.9% month-on-month, indicating that overseas fabric restocking demand has largely ended.
This divergence means that the short-term recovery in apparel orders has not effectively transmitted to intermediate goods. Mills should guard against inventory buildup risks, especially for regular varieties, and align stock levels more closely with actual orders.