China's cotton imports in May 2026 presented a sharp contrast: a 31.7% month-on-month decline but a 2.3-fold year-on-year surge. Behind this divergence lie seasonal demand weakness, high international prices, and policy-driven quota releases. For textile mills, the signal is clear: procurement is slowing, but structural demand remains.
Import Volume: Seasonal Lull and High Prices Curb Buying
Customs data show May imports at 110,000 tons, down 51,000 tons from April—the first time monthly imports fell below 120,000 tons since November 2025. Cumulative imports for the first five months reached 830,000 tons, still up 90.7% year-on-year. For the 2025/26 season, the nine-month total stood at 1.305 million tons, up 45%.
Two factors drove the slowdown. First, international cotton prices rose sharply in April, eroding cost advantages and pushing mills to draw down domestic stocks. Second, the textile sector entered its traditional off-season, with weak new orders reducing restocking appetite. This suggests that earlier import surges are being absorbed, not that demand has collapsed.
Source Country Mix: Brazil Dominates, US Share Rebounds
Brazilian cotton maintained its top position, accounting for 58% of May imports (about 64,000 tons), up roughly 5 percentage points from April. Its stable supply and competitive pricing make it a cornerstone for Chinese mills.
US cotton's share rebounded from 15% to 22%, a 7-percentage-point increase. This was not driven by price advantages but by rush orders for apparel exports to the US, as some exporters accelerated production to avoid potential tariff hikes. Whether this trend continues depends on trade policy.
Australian cotton's share fell sharply. ABARES' June report estimated 2025/26 Australian output at just 1 million tons, down 16% year-on-year, with planted area down 12%. Tight spot supply allowed Brazil and the US to capture market share. Kazakhstan and Afghanistan held 5% and 4% shares, respectively.
Average Import Price: Up 2.6% Month-on-Month, Led by US and Australian Cotton
The average import price reached USD 1,699/ton in May, up 2.6% month-on-month but still down 11.9% year-on-year. Price divergences were notable:
- Brazilian cotton: USD 1,615/ton, up 2.1% MoM, down 6% YoY
- US cotton: USD 1,856/ton, up 7.6% MoM, down 7.9% YoY
- Australian cotton: USD 1,948/ton, up 8.3% MoM, up 7.3% YoY
Australian cotton's price rise reflected supply concerns from the production cut. US cotton followed closely, supported by export orders. Brazilian cotton showed the smallest increase, reinforcing its cost advantage.
Trade Mode: Bonded Warehousing Share Rises to 45%
In May, bonded warehouse transactions accounted for 45% of imports (up 2 percentage points), while special customs supervision zone logistics accounted for 43% (up 6 points). General trade dropped to 7% (down 8 points). This shift indicates mills are using bonded storage to hedge against price volatility and tariff uncertainty, maintaining flexible inventory management.
Downstream Signals: Apparel Exports Up MoM, Textiles Weaken
May textile and apparel exports totaled USD 25.61 billion, up 6.5% month-on-month but down 2.3% year-on-year. Apparel exports reached USD 13.02 billion, up 14.7% MoM but down 4.1% YoY. Textile exports were USD 12.59 billion, down 0.9% MoM and 0.3% YoY.
The apparel rebound was driven by summer order shipments, but the year-on-year decline suggests final demand remains tepid. The textile export slowdown confirms that overseas restocking has peaked, likely pressuring raw material demand in coming months.
Global Supply-Demand: Production Edges Up, Consumption Down, Stocks Tighten
The USDA June report for 2025/26 showed global production up 3,300 tons, consumption down 5,400 tons, exports up over 1%, and ending stocks down 131,000 tons. The stocks-to-use ratio fell to 64%.
Production gains came from Egypt, partly offset by Argentina's decline. Consumption cuts were led by Bangladesh, Pakistan, and South Korea, while China and Vietnam saw increases. Export growth was driven by Brazil, the US, Kazakhstan, and Turkey.