China's cotton imports in May 2026 totaled 110,000 tons, a sharp month-on-month decline of 31.7%, yet still a 2.3-fold year-on-year surge. This contrast highlights the core tension in the textile raw material market: rising international cotton prices and weak seasonal domestic demand have dampened procurement enthusiasm, while a low base a year earlier and the implementation of sliding-duty quotas supported the annual comparison. Cumulative imports for the first five months reached 830,000 tons, up 90.7% year-on-year, indicating a shift from active stockpiling to cautious观望.
Import Source Restructuring: Brazilian Cotton Dominates, US Cotton Rebounds on Rush Orders
The import source landscape saw clear divergence. Brazilian cotton's share rose to 58% in May, cementing its top position, aided by a price advantage ($1,615/ton, up 2.1% month-on-month). US cotton's share jumped 7 percentage points to 22%, driven by concentrated production scheduling for apparel exports to the US. Australian cotton's share declined due to tight spot supply. Kazakhstan's share fell to 5%, and Afghanistan's to 4%. Bonded warehouse logistics remained the primary trade mode at 45%, while general trade slumped 8 percentage points to 7%, reflecting companies' preference for flexible inventory management through bonded channels.
Price Transmission and Cost Pressure: Average Import Price Rises, Arbitrage Narrows
Higher international prices directly raised import costs. The average import price rose to $1,699/ton, up 2.6% month-on-month but still 11.9% lower year-on-year. US cotton saw the largest monthly increase (7.6% to $1,856/ton); Australian cotton rose 8.3% to $1,948/ton, turning positive year-on-year (+7.3%); Brazilian cotton rose a modest 2.1% to $1,615/ton. For textile mills, the cost advantage of foreign cotton is shrinking, especially for Australian cotton, which may prompt a shift toward more economical Brazilian or domestic options.
Downstream Demand: Apparel Exports Surge, Fabric Exports Falter
Downstream demand showed divergence. May textile and apparel exports totaled $25.61 billion, up 6.5% month-on-month but down 2.3% year-on-year. Apparel exports reached $13.02 billion, surging 14.7% month-on-month on concentrated summer order shipments. Fabric exports fell 0.9% month-on-month to $12.59 billion, indicating that overseas restocking of fabrics had largely concluded. Cumulative exports for January-May were $116.74 billion, roughly flat year-on-year. This suggests that the slowdown in cotton procurement is an active inventory adjustment, not a collapse in end demand.
Global Supply Adjustments: Australia's Sharp Output Cut, Ending Stocks Lower
Supply-side uncertainty is intensifying. The USDA's June 2025/26 global cotton supply-demand report showed a slight 0.33 million-ton increase in production, a 0.54 million-ton cut in consumption, an over 1% rise in exports, and a sharp 131,000-ton reduction in ending stocks, bringing the stocks-to-use ratio to 64%. More notably, ABARES cut Australia's 2025/26 cotton output estimate to 1 million tons, down 16% year-on-year, with planted area falling 12% to 6.825 million mu. Although output still exceeds the 10-year average by 20% due to irrigation, the reduction signals tightening supply for high-grade cotton. Mills reliant on Australian cotton should secure alternative sources in advance.