China's cotton imports saw a sharp monthly decline in May 2026, but the shifts in pricing and sourcing structure carry deeper implications for the textile supply chain. According to Chinese customs data, imports totaled just 110,000 tons, down 31.7% month-on-month, though still up 2.3 times year-on-year. This volume-price divergence reflects the combined effects of rising international cotton prices, shifting downstream order cycles, and regional supply constraints.
Import Volume Drop: Off-Season and Cost Pressure
The 31.7% monthly decline was no accident. International cotton prices surged in April on drought concerns in major producing regions, pushing Brazilian and US cotton prices up 2.1% and 7.6% month-on-month respectively. The average import price rose to $1,699/ton, eroding the cost advantage of foreign cotton over domestic supplies. Meanwhile, China's textile sector entered its traditional off-season, with new orders insufficient and mills preferring to draw down existing inventories rather than restock.
Cumulative data shows total imports in the first five months of 2026 reached 830,000 tons, up 90.7% year-on-year. For the 2025/26 marketing year (September-August), nine-month imports totaled 1.305 million tons, up 45% year-on-year. While annual volumes remain elevated due to earlier quota releases, the monthly deceleration signals a clear shift. If international prices stay elevated, import volumes could face further pressure in the second half.
Sourcing Shift: Brazil Dominates, US Share Rises on Order Rush
Changes in import shares reveal deeper industrial logic. Brazil's share rose to 58%, up from around 50% in April, cementing its position as China's top cotton supplier. Brazilian cotton benefits from stable output, competitive pricing ($1,615/ton, below the average), and mature trade channels, steadily squeezing other origins.
The most notable shift is the rebound in US cotton. Its share jumped 7 percentage points to 22% in May. The driving force was not US cotton's intrinsic appeal but "order rush for US-bound garments." US clients, seeking to avoid potential tariff risks or meet summer demand, pushed Chinese apparel factories to accelerate deliveries. Using US-origin cotton simplifies customs clearance and downstream certification for these orders, prompting mills to make concentrated purchases. This demand is inherently lumpy and may not persist.
Australian cotton saw its share decline due to tight spot supply. ABARES reported in June that 2025/26 Australian cotton output is estimated at only 1 million tons, down 16% year-on-year, with planted area falling 12%. Water shortages and below-average rainfall in eastern growing regions hit both acreage and yields. Although output is still 20% above the 10-year average, short-term supply gaps have pushed prices sharply higher—Australian cotton averaged $1,948/ton in May, up 8.3% month-on-month, making it the most expensive mainstream import.
Downstream Impact: Garment Exports Up, Fabric Exports Flat
Cotton import data must be read alongside downstream textile and apparel exports. In May, China's combined textile and apparel exports totaled $25.61 billion, up 6.5% month-on-month but down 2.3% year-on-year. The divergence was clear: apparel exports reached $13.02 billion, up 14.7% month-on-month, driven by concentrated shipments of summer orders; textile exports were $12.59 billion, down 0.9% month-on-month, indicating overseas fabric restocking had largely ended.
This "apparel strong, textiles weak" pattern directly influenced cotton procurement. Order rushes for garments typically require faster raw material turnover and shorter lead times, explaining why US cotton imports grew despite the broader off-season—US cotton is often used for high-count yarns and branded apparel orders closely tied to US-bound exports. The weakening fabric export suggests demand for conventional yarns, which typically use Brazilian or Indian cotton, may slow further.
Global Supply-Demand: Stocks Draw Down, Australian Drought a Key Variable
The USDA's June supply-demand report made minor adjustments to the 2025/26 global outlook: production up 3,300 tons, consumption down 5,400 tons, but ending stocks were cut by over 131,000 tons, pushing the stocks-to-use ratio down to 64%. Exports were raised by over 1%, with Brazil, the US, Kazakhstan, and Turkey as main sources of increase. Overall, the global cotton market is in a tight balance with a clear destocking trend.
Australia's production shortfall is the most prominent supply-side variable. While 1 million tons still exceeds historical averages, the 16% year-on-year drop means high-grade cotton supply will tighten significantly. For spinners relying on Australian cotton for premium fabrics, this translates to higher costs and substitution pressure. Brazilian cotton, though ample and cheaper, cannot fully replace Australian cotton in terms of fiber length and strength.