In the first half of 2026, China's textile and apparel exports measured by customs statistics showed a steady growth trend, with a slight month-on-month increase. However, the price gap between domestic and international cotton remained at a historical high during the same period, with ICE cotton futures significantly weaker than Zhengzhou cotton futures. This price signal contrasts intriguingly with the resilience of China's exports.
Domestic-International Price Gap: A Divergent Cost Signal
In June 2026, domestic and international cotton prices stabilized after a decline, but the basis structure did not recover. Domestic spot basis remained firm, with strong support at the bottom of Zhengzhou cotton futures prices; while ICE cotton futures showed weak rebound momentum amid macro pressure and weak demand, leading to a continuous widening of the domestic-international price gap. This gap means that Chinese spinning enterprises bear higher raw material cost pressure than their international counterparts.
For export-oriented textile enterprises, raw material cost disadvantages should logically weaken their competitiveness in international orders. However, the stable export data in the first half of the year indicates that downstream enterprises have partially offset this cost pressure through product structure upgrades, exchange rate fluctuation management, and supply chain efficiency improvements.
Divergence in Southeast Asian Exports: Competition Not One-Sided
In contrast to the steady domestic exports, major Southeast Asian textile producing countries saw a synchronized contraction in exports in the first half of the year. Bangladesh recorded the largest year-on-year decline, while export growth in Vietnam and India also slowed significantly. This divergence deserves deeper interpretation.
Bangladesh's export decline is largely due to rising energy costs and concerns about order delivery stability. The comprehensive advantages of China's textile industry chain in delivery cycles, product variety, and quality control have become a plus point in the context of overseas buyers' increasing sensitivity to supply chain security.
The contraction of orders from Southeast Asian competitors has created space for Chinese textile enterprises to regain some mid-to-high-end orders. Especially in areas like chemical fiber fabrics and functional clothing, the quick response capability of Chinese factories remains difficult for small and medium-sized Southeast Asian factories to replace.
Price Expectations: The Game Between Buyer Caution and Inventory Rhythm
The high domestic-international cotton price gap has intensified the wait-and-see sentiment among downstream buyers. Some overseas brand owners and retailers tend to shift raw material cost pressure to Chinese suppliers in order negotiations, with a strong willingness to drive down prices.
On the other hand, domestic cotton prices have strong bottom support, leaving limited room for spinning enterprises to lower prices. This game leads to longer order cycles and a more pronounced trend of large orders being split into small, urgent orders. For factories capable of flexible capacity adjustment and small-batch quick response, this has actually resulted in stronger bargaining power.
From a price expectation perspective, if the domestic-international price gap does not narrow effectively in the second half of the year, the export profit margins of Chinese spinning enterprises in conventional varieties will face further compression. However, in differentiated products, environmentally certified fabrics, and brand OEM fields, the pricing power of Chinese enterprises remains solid.