May Cotton Imports Plummet 31.7% Month-on-Month: Restocking Logic Reshaped by Off-Season and Cost Pressures

China's cotton imports in May 2026 fell 31.7% month-on-month to 110,000 tons, yet more than tripled year-on-year. Behind this apparent contradiction lies a fundamental restructuring of procurement logic driven by the off-season and cost pressures. According to customs data, the sharp monthly decline was mainly due to higher international cotton prices eroding the cost advantage of foreign cotton, coupled with a clear off-season pattern in downstream textiles where mills relied on domestic inventories amid weak new orders. In terms of origin, Brazilian cotton maintained its dominant position with a 58% share, while US cotton rebounded to 22%, up 7 percentage points month-on-month. This rebound was fueled by concentrated production of apparel orders for the US market and tight spot supply of Australian cotton. The average import price rose to $1,699 per ton, up 2.6% month-on-month, though still 11.9% lower year-on-year. Australian cotton saw the largest price increase at 8.3% month-on-month, reflecting supply constraints. On the global supply-demand front, the USDA's June report showed a slight increase in global production and a 131,000-ton reduction in ending stocks, with the stocks-to-use ratio falling to 64%. ABARES downgraded Australia's cotton output forecast to 1 million tons, down 16% year-on-year, due to irrigation water shortages and reduced rainfall. However, output remains 20% above the 10-year average. For buyers, the current import price, though up month-on-month, is still nearly 12% lower year-on-year, offering room for phased forward contracting. Brazilian and US cotton can serve as cost-effective alternatives to premium-priced Australian cotton. For exporters, the global inventory drawdown suggests medium-term price support, and contracts should include price adjustment clauses. The Australian crop decline, while notable, does not signal a structural shortage given the ample global supply from Brazil and the US.