The wool textile industry in the first five months of 2026 presents a seemingly contradictory picture: modest export growth but a double-digit surge in imports. Customs data shows total wool textile trade at $6.06 billion, up 8.16% YoY, with exports of $4.35 billion growing only 2.29% and imports of $1.71 billion surging 27.35%. The widening gap between export and import growth rates raises questions about what drives this imbalance.
Import Surge: Dual Engines of Domestic Capacity and High-End Demand
The core driver of import growth is upstream raw material procurement. Cashmere raw material and product imports hit $127 million, up 44.61% YoY, the highest among all categories. This reflects two dynamics: first, domestic wool processing mills are operating at higher capacity, boosting purchases of premium Australian and South African wool; second, high-end wool consumption is recovering, with cashmere fabrics and garments seeing rising import volumes and prices.
Rising international wool prices further inflate import values. For buyers, this signals cost pressures cascading downstream. Wool top exports, a key intermediate product, reached 13,300 tons worth $178 million, up 21.68% YoY, indicating higher domestic processing utilization but also greater reliance on imported raw materials.
Export Divergence: Emerging Markets Fill the Gap
Export markets show clear structural divergence. Among traditional Western markets, German orders held steady, while exports to Vietnam and Italy saw volume declines, though values rose due to higher unit prices. The real growth engine came from emerging economies: exports to India surged 40.19% to $76 million, and to Turkey rose 24.89% to $41.46 million, with wool top as the main driver.
This reflects expanding wool processing capacity in emerging textile manufacturing hubs like India and Turkey, which are absorbing global textile chain shifts. For Chinese exporters, this means diversification away from sole reliance on Western markets, though the stability and pricing power of emerging market orders remain uncertain.
By category, wool product exports grew 5.11%, cashmere products 6.97%, with yarns and knitted sweaters showing steady demand. Notably, cashmere export growth lags far behind the 44.61% import surge, suggesting that domestic firms process imported raw materials mainly for domestic sales or high-end exports, with room for value-added improvement.
Chain Transmission: Profit Margin Squeeze
The dual growth does not benefit all links equally. Import growth far outpacing exports means rising raw material costs are squeezing processing margins. Wool top export value rose 21.68%, but with rising import prices, actual gross margins may be under pressure.
China's integrated wool textile chain—from spinning to knitting to worsted fabrics—provides a competitive edge, but high-end, differentiated products are key to overcoming price bottlenecks. The 44.61% surge in cashmere raw imports versus 6.97% export growth highlights a gap in brand premium and channel capabilities for finished goods.
Outlook: Autumn/Winter Orders vs. Cost Pressure
As the peak season for autumn/winter apparel orders approaches, wool exports are likely to maintain resilience. However, raw material imports may stay elevated, and if international wool prices climb further, cost management will be critical. For buyers, locking in prices and optimizing inventory are essential.