China's wool textile industry delivered a seemingly contradictory performance in the first five months of 2026: total trade reached USD 6.06 billion, up 8.16% year-on-year, but the growth gap between exports and imports widened to 24 percentage points. Exports inched up only 2.29%, while imports surged 26.65%. This is not a simple recovery but a structural rebalancing—external demand is shifting, domestic mills are stockpiling raw materials, and profit margins along the supply chain are being redistributed.
Import Side: Raw Material Stockpiling Driven by Price
Import data flashed the earliest warning signal. From January to May, imports of wool textile materials and products totaled USD 1.71 billion, surging 26.65% year-on-year. Core raw materials—wool and semi-processed wool—accounted for USD 1.1 billion, growing at a staggering 34.04%. However, the import volume stood at 130,000 metric tons, essentially flat year-on-year. This means the increase in import value was almost entirely driven by rising international wool spot prices, not actual demand expansion.
For domestic wool spinning and cashmere processing mills, this import surge sends two messages: first, strong willingness to replenish raw material inventories signals optimistic downstream production expectations; second, the anticipation of further wool price increases is prompting companies to lock in supplies early. This 'price-up, volume-flat' import pattern is essentially a preemptive response to tightening global wool supply.
Export Side: Emerging Markets Reshaping Demand Landscape
In contrast to the import frenzy, exports displayed a typical 'structural divergence.' In USD terms, exports reached USD 4.35 billion, up 2.29% year-on-year, but in RMB terms, exports fell 1.01% due to exchange rate fluctuations. Behind this volume-price split lies a dramatic shift in market composition.
Emerging markets emerged as the sole bright spot. Orders for wool tops from India and Turkey achieved leapfrog growth: exports to India hit 9,086 metric tons, surging 77.22% year-on-year; exports to Turkey reached 1,165 metric tons, up 54.69%. Both countries are in a textile capacity expansion phase, driving concentrated demand for semi-processed wool tops. The capacity build-up in South Asia and the Middle East is opening a stable incremental channel for domestic wool primary processing mills.
In contrast, traditional markets showed insufficient growth momentum. Although exports of wool and cashmere raw materials grew 5.11% and 6.97% respectively, the pace was far below the explosive growth in emerging markets. While high-end natural fiber products are gaining overseas recognition, the overall export stability relies heavily on the substitution effect of emerging markets.
Supply Chain Dynamics: Game Between Raw Materials and Finished Goods
The divergence between import and export data reflects the game along the supply chain. Upstream raw material costs are high, but downstream export prices for finished goods have not risen in tandem. This means profit margins in the intermediate links are being squeezed.
For domestic wool mills, raw material procurement strategies need to be more refined. On one hand, the upward trend in international wool prices is unlikely to reverse in the short term, so advance stockpiling can hedge cost risks. On the other hand, while orders from emerging markets are growing rapidly, order prices and payment terms require careful evaluation to avoid the trap of 'volume growth without profit growth.'
For buyers, the current market environment offers an opportunity to reassess supply chains. The surge in wool top demand from India and Turkey may squeeze domestic supply, intensifying competition for high-quality raw materials. Additionally, RMB exchange rate fluctuations add uncertainty to import settlements.
Industry Outlook: Optimizing External Demand Structure and Inventory Management
The data from the first five months paints a picture of 'optimizing external demand structure and entering a raw material price upcycle.' The rise of emerging markets is reshaping export dependence, while high raw material prices are forcing companies to improve inventory management capabilities.
In the long run, the restructuring of global wool sourcing patterns will be a slow but irreversible process. The expansion of textile capacity in South Asia and the Middle East means Chinese wool textile companies need to shift from purely exporting raw materials to exporting semi-finished and finished products. Meanwhile, the high value-added advantage of domestic cashmere deep processing remains a key moat against price volatility.