In the first five months of 2026, China's total import and export of wool textile materials and products exceeded $6 billion, reaching $6.06 billion, an increase of 8.16% year-on-year. On the surface, the industry appears to be recovering steadily. However, a closer look at the breakdown reveals that domestic and foreign trade are moving in very different directions: exports grew by only 2.29%, while imports surged by 26.65%. This divergence reflects both the rigid pressure of global wool price transmission and the structural opportunities brought by capacity expansion in emerging markets.
Import Side: Price-Driven Restocking Reshapes Wool Supply
The import data is the most noteworthy signal in this round of trade. From January to May, imports of wool materials and products reached $1.71 billion, up 26.65% year-on-year. The core category—raw wool and primary processed wool—recorded imports of $1.10 billion, a surge of 34.04%. Notably, the total import volume was 130,000 tons, roughly flat compared to the same period last year. This means the increase in import value was almost entirely driven by higher prices. The rising international spot price of wool is pushing up raw material costs for Chinese wool textile enterprises.
From an industrial logic perspective, the willingness of domestic wool textile companies to restock is strengthening. Capacity utilization in cashmere deep processing and wool spinning and weaving segments continues to release, driving upstream raw material demand. However, the combination of rising prices and stable volumes suggests that companies are not hoarding more raw materials; they are simply paying higher prices for the same amount. This will squeeze profit margins on finished product exports in the second half of the year, especially for mid-to-high-end fabric and cashmere product exporters reliant on imported wool.
Meanwhile, the global wool supply structure is quietly shifting. Traditional producing regions like Australia and New Zealand face supply stability issues due to climate and logistics, while emerging regions such as South America and South Africa are gradually improving their wool quality and trade volumes. Chinese importers have more sourcing options, but their bargaining power has not strengthened, given the limited elasticity of global high-quality wool supply.
Export Side: Emerging Markets Drive Semi-Finished Product Growth
On the export side, total exports reached $4.35 billion, up 2.29% in dollar terms, but down 1.01% in renminbi terms, highlighting a clear divergence between volume and value. However, the real growth driver is not traditional European or American markets, but two emerging markets: India and Turkey.
Wool top is the core category behind this export surge. In the first five months, exports of wool top to India reached 9,086 tons, a staggering 77.22% increase year-on-year; exports to Turkey hit 1,165 tons, up 54.69%. This growth is no accident. India is accelerating the vertical integration of its domestic textile industry, with capacity expansion in spinning and weaving directly boosting demand for semi-finished products like wool top. Turkey, with its geographic proximity to Europe and relatively low labor costs, has become an important node for textile processing in the Middle East and Eastern Europe, and its procurement of wool top similarly reflects capacity spillover effects.
For domestic wool primary processing companies, this means a stable incremental channel is forming. The traditional reliance on European and American brand orders is being supplemented by semi-finished product exports to emerging markets. However, there is a need to remain cautious: once India and Turkey's spinning capacity reaches saturation, growth in wool top demand may slow. At that point, domestic companies should prepare by developing differentiated products, such as high-count wool top or functional blended fibers.
Industrial Transmission: Raw Material Cost Pressure vs. Export Pricing Game
There is an implicit transmission chain between rising imported wool prices and the boom in semi-finished product demand from emerging markets. Domestic wool companies purchase expensive wool, process it into wool top for export to India and Turkey, which then turn it into yarn and fabric for export to Europe and America. This means domestic companies bear all the risk of raw material price fluctuations, while the profits from final brands are captured in the India and Turkey segments.
Data shows that export growth rates for wool and cashmere products were 5.11% and 6.97% respectively, far below the growth rate of wool top to emerging markets. This suggests that the premium pricing ability of high-end finished products has not improved in tandem, and domestic companies have limited bargaining power in the value chain. If international wool prices continue to rise and purchasing prices for wool top from emerging markets fail to keep pace, the gross margins of domestic primary processing companies will be squeezed.