Wool Trade Surges: Emerging Markets Drive Yarn Demand, Raw Material Imports Rise in Value

China's wool textile sector delivered a mixed performance in the first five months of 2026, with total trade exceeding USD 6 billion but growth driven by distinct forces. Export volumes to emerging markets surged, while raw material imports skyrocketed in value, signaling both capacity expansion and shifting global supply dynamics.

Emerging Markets Fuel Wool Top Exports

From January to May 2026, China's wool textile exports reached USD 4.35 billion, up 2.29% year-on-year. Though the headline growth appears modest, product-level data reveals stronger momentum. Exports of wool and cashmere products grew 5.11% and 6.97% respectively, reflecting sustained global demand for premium natural fibers.

The real driver came from emerging markets. Shipments of wool top to India soared 77.22% to 9,086 tons, while exports to Turkey jumped 54.69% to 1,165 tons. This surge indicates that spinning capacity in South Asia and the Middle East is expanding rapidly, creating stable demand for Chinese semi-processed materials. For domestic processors, this represents a durable export channel tied to the region's industrial build-out.

Raw Material Imports: Price-Driven Surge

Raw material imports tell a more dramatic story. Import value reached USD 1.71 billion, up 26.65%, with wool and semi-processed wool imports hitting USD 1.10 billion—a 34.04% increase. However, import volume remained flat at 130,000 tons, underscoring a 'price-up, volume-stable' pattern driven by rising international wool spot prices.

The faster growth of imports compared to exports signals heightened restocking activity among domestic mills and cashmere processors. Companies are locking in inventory amid a rising price cycle, while global wool supply chains are being reshuffled. China's procurement strategy will be critical in managing future cost pressures.

Diverging Markets and Risk Management

The trade data reveals a clear divide: export growth relies heavily on emerging markets, while traditional markets remain sluggish. On the import side, strong raw material demand contrasts with uncertain final consumption recovery. Currency fluctuations also pose challenges—export values in RMB terms dipped 1.01%, squeezing margins for traders.

For buyers and exporters, the key strategy is dynamic inventory and order management. The wool top boom suggests sustained demand from emerging markets, but price volatility remains a risk.

For Buyers - Lock in medium-term pricing agreements with suppliers to hedge against volatile international wool prices. - Monitor capacity expansion in India and Turkey; accelerated local spinning could reduce wool top demand, requiring flexible order adjustments.

For Exporters - While emerging market orders are booming, pay attention to payment security and logistics, especially for Turkish clients amid geopolitical uncertainties. - Explore direct sourcing from overseas farms or cooperatives to bypass intermediaries and improve margins as import costs rise.