In the first five months of 2026, China's wool textile trade totaled USD 6.06 billion, up 8.16% year-on-year. However, the structural shift lies in the sub-data: wool raw material imports surged 34.04% to USD 1.1 billion, while exports only grew 2.29%. The import growth far outpacing exports signals a deep restocking cycle in the domestic supply chain, not simple demand expansion.
Import Surge: Price-Driven, Not Volume-Driven
Customs data shows wool and semi-processed wool imports totaled 130,000 tons, almost flat year-on-year. But the import value jumped from about USD 820 million to USD 1.1 billion, with the gap almost entirely due to rising international wool spot prices. This suggests that domestic companies are pre-emptively locking in raw materials based on expectations of further price hikes, not an order boom. For buyers, this means cost pressure will gradually pass downstream.
From the source side, global wool supply is restructuring. Traditional suppliers like Australia and New Zealand remain stable, but shares from emerging regions like South America and South Africa are rising. This aligns with shifts in global wool production: drought in Australia reduced shearing volumes, while Uruguay and Argentina increased output. China, as the world's largest wool processor, is actively diversifying sourcing channels to mitigate risk.
Export Divergence: Emerging Markets Drive Semi-Product Demand
Export performance was more mixed. Total wool product exports reached USD 4.35 billion, up 2.29% in USD terms, but down 1.01% in RMB terms after adjusting for exchange rate fluctuations. This reflects a volume-price divergence: export volumes grew but unit prices faced pressure, indicating that overseas final consumption has not fully recovered.
The bright spot is semi-products like wool tops. Exports to India surged 77.22% to 9,086 tons, and to Turkey rose 54.69% to 1,165 tons. The surge in these two markets is no accident: India is absorbing global textile capacity relocation, with rapid expansion in downstream spinning and weaving, creating strong demand for processed wool tops. Turkey, leveraging its geographic advantage as a supply base for European fast fashion brands, is increasing purchases of high-end natural fiber raw materials.
This means China's wool processing companies are transitioning from "finished product exporters" to "semi-product suppliers." Growth in exports to India and Turkey essentially represents trade in intermediate links: China imports raw wool, processes it into tops, and exports them, earning processing fees. While profit margins are limited, orders are stable and less volatile to final consumption fluctuations.
Chain Transmission: Who Benefits, Who Bears Pressure
High raw material prices impact different links unevenly. Upstream scouring and combing companies benefit from higher processing volumes but must bear price volatility risk. Midstream fabric and yarn producers face a squeeze between rising costs and limited ability to raise prices for end products, especially in the mid-low end market where brands resist price hikes.
Notably, cashmere product exports grew 6.97%, outpacing wool products, indicating stronger pricing power for high-end natural fibers overseas. But cashmere raw material imports also face upward price pressure, forcing domestic cashmere processors to balance quality upgrades with cost control.
Regionally, production clusters in Jiangsu, Zhejiang, and Shandong saw rising capacity utilization, but profit margins did not expand proportionally. Industry data shows the wool textile sector's profit margin only increased 0.3 percentage points in the first five months, as costs absorbed most incremental revenue.