Cotton Imports Surge Nearly 300%: China's Textile Mills Reshape Raw Material Strategy in H1 2026

In June 2026, China imported approximately 110,000 tons of cotton, flat month-on-month but surging 294.9% year-on-year. This is not an isolated spike: H1 cumulative imports reached 940,000 tons, up 102.2% from a year earlier, and the 2025/26 season (Sep-Jun) totaled 1.44 million tons, a 51.6% increase. These figures signal a fundamental reset in the raw material strategy of China's textile industry.

The Logic Behind the Surge

The doubling of imports is driven by a persistent price gap between domestic and international cotton. In H1 2026, global cotton prices were suppressed by expectations of a bumper harvest, while domestic prices remained elevated due to Xinjiang cotton policies and quota constraints. The spread widened to over RMB 1,500 per ton at its peak, making imported cotton significantly cheaper for mills.

Another factor is the accelerated quota release. The sliding-duty quota was issued earlier than usual in 2026, and combined with rigid demand from processing trade orders, mills rushed customs clearance in May-June, forming a high plateau rather than a one-off spike.

Structural Shift Revealed by Seasonal Data

The 2025/26 season's first ten months saw imports of 1.44 million tons, up 51.6% year-on-year, already surpassing the full 2024/25 season total. If the current monthly pace of 144,000 tons continues through July-August (traditionally low season), annual imports will easily exceed 1.7 million tons, a five-season high.

This reflects a deep change in downstream orders. European and American brands are tightening traceability requirements for non-Xinjiang cotton, forcing export-oriented mills to increase imported cotton usage. Meanwhile, growing demand for high-count yarns and premium fabrics has raised quality requirements, favoring Australian and U.S. cotton.

Chain Reaction Across the Supply Chain

The import surge directly pressures domestic cotton sales. By end-June, Xinjiang cotton sales rates had fallen about 8 percentage points year-on-year, with some ginners holding significant inventories. This depresses domestic prices but further widens the import advantage, creating a self-reinforcing cycle.

For spinners, the impact is immediate: imported cotton reduces raw material costs for 32s carded yarn by about RMB 1,200 per ton, a crucial margin buffer in the highly competitive grey fabric market. Weaving clusters in Shengze and Nantong have already designated imported cotton as the preferred feedstock for Q3 replenishment.

Practical Recommendations

For Procurement Teams - Monitor the second round of sliding-duty quota issuance in August-September and lock in forward cargoes early to avoid concentrated arrivals that inflate premiums. - When the domestic-import price gap narrows to within RMB 800/ton, consider increasing Xinjiang cotton blending to diversify sourcing risk. - Use basis contracts with major traders and hedge price exposure via Zhengzhou Cotton Futures rather than relying solely on spot purchases.

For Export-Oriented Mills - Clearly specify imported cotton ratios in export orders to meet customer traceability requirements and prevent rejection. - Track U.S. and Australian crop reports; global production for 2026/27 is expected to edge lower, so lock in at least 80% of Q4 cotton needs by September. - Utilize processing trade manuals for imported cotton to reduce tariff costs and improve export pricing competitiveness.