In the first five months of 2026, China's wool textile trade exceeded $6.06 billion, up 8.16% year-on-year. However, behind this recovery lies a structural divergence: export growth relies on semi-processed orders from emerging markets, while imports surge due to rising international wool prices, driving up raw material costs. This dynamic creates distinct challenges for upstream buyers, midstream processors, and exporters.
Exports totaled $4.35 billion, a modest 2.29% increase. The real driver was wool top shipments to India and Turkey, which soared 77.22% and 54.69% respectively. India alone imported 9,086 tons of wool top. This reflects rapid textile capacity expansion in South Asia and the Middle East, transforming these countries into spinning hubs. For Chinese primary processors, this offers a stable growth channel but also heightens dependency on concentrated markets.
High-end cashmere products grew 6.97%, continuing their premium value recognition overseas, but their volume is too small to offset slowing growth in conventional wool goods.
On the import side, raw material costs are rising sharply. Import value reached $1.71 billion, up 26.65%, driven entirely by price increases: volume was flat at 130,000 tons. Wool and semi-processed wool imports alone rose 34.04% in value. International wool spot prices are directly squeezing the margins of domestic spinners and processors.
This creates a profit redistribution across the chain. Primary processors with direct access to India and Turkey orders are the biggest winners. Exporters relying on imported wool for conventional fabrics or garments face compressed margins and weak pricing power.
Given limited supply growth from major producers like Australia and ongoing capacity expansion in emerging markets, the tight supply-demand balance is likely to persist. Buyers should watch international auction trends and lock in forward contracts during price dips. Exporters should increase marketing of semi-processed products to India and Turkey, explore price-linked contracts with clients, and consider premium cashmere lines for new markets.