In the first five months of 2026, China's total import and export of wool textile raw materials and products reached $6.06 billion, up 8.16% year-on-year. However, the more telling signal is the structural divergence: exports grew only 2.29% while imports surged 26.65%. This indicates a deep restocking cycle across the domestic wool supply chain, with upstream raw material competition shifting from cost to capacity assurance.
Behind the Import Surge
The import boom is not driven by volume. Wool and semi-processed wool imports stood at 130,000 tons, flat from last year, but the value soared to $1.1 billion, up 34.04%. This volume-price decoupling confirms global wool spot prices are on an upward trajectory. For Chinese buyers, the question is no longer whether to buy, but when—with expectations of further price increases prompting pre-orders.
This price pressure will directly squeeze margins for downstream wool fabric and garment manufacturers. If brands resist price hikes, gross margins in the second half of 2026 will face systemic pressure. Companies reliant on imported wool, especially in the high-end worsted segment, must prioritize cost control as a competitive differentiator.
Emerging Markets: A Second Growth Engine for Wool Tops
While overall export growth is modest, structural highlights are clear. Wool and cashmere raw material exports grew 5.11% and 6.97% respectively, with wool tops as the star performer. Shipments to India reached 9,086 tons, up 77.22%, and to Turkey 1,165 tons, up 54.69%. Together, these two markets absorbed most of the incremental export volume.
India and Turkey are in the midst of textile capacity expansion. The ramp-up of spinning capacity in South Asia and the Middle East directly drives demand for semi-processed wool tops. For Chinese primary processors, this means export markets are shifting from traditional EU/US destinations to emerging industrial economies. This trend is unlikely to reverse in the next 2-3 years, as capacity expansion is still in its early stages.
Divergence in Domestic and Foreign Markets
Export value in RMB terms fell 1.01%, highlighting the erosion of actual income by exchange rate fluctuations. Despite a slight increase in USD terms, RMB appreciation has squeezed profit margins upon settlement. Exporters must strengthen currency risk management, with forward contracts or RMB settlement clauses becoming standard practice.
Meanwhile, the hot domestic raw material market signals resilient domestic demand. Rising import wool prices will likely spill over to domestic wool markets, benefiting pastoral regions in Inner Mongolia and Xinjiang. However, downstream fabric and garment makers must guard against inventory risks—if end-consumer demand fails to recover, high-cost raw materials will turn into heavy stockpiles.