The latest cotton import data from China Customs has sent ripples through the textile industry: 110,000 tons imported in June alone, a year-on-year surge of nearly 300%. This figure not only sets a new high for the same period in recent years but also sends a clear signal that the supply-demand balance in China's textile raw material market is shifting.
Three Drivers Behind the Import Surge
According to public Customs data, June imports were flat month-on-month but soared 294.9% year-on-year, meaning the base in June 2025 was extremely low—only about 28,000 tons. This combination of low base and high increment is not the result of a single factor.
First, the domestic-international price spread has widened. In the first half of 2026, international cotton prices were suppressed by expectations of a global production increase, while domestic prices remained relatively firm due to output fluctuations in Xinjiang and low reserve stocks. The price spread once exceeded 2,000 yuan per ton, making imported cotton highly cost-effective and driving mills to boost purchases.
Second, the quota usage window was concentrated. The first half of the year is typically the peak period for utilizing sliding-duty quotas and processing trade quotas, with enterprises tending to clear customs in bulk. Cumulative imports from January to June reached 940,000 tons, doubling year-on-year, indicating a clear front-loading of quota usage.
Third, restocking demand was released with a lag. Cumulative imports for the 2025/26 season (September 2025 to June 2026) reached 1.44 million tons, up 51.6% year-on-year. This means the full-season import volume is already near historical highs. After adopting a strategy of low inventory and fast turnover in the first half, textile mills had to accelerate restocking in the face of recovering orders.
Transmission Effects on the Supply Chain
The direct impact of the import surge is first felt in port inventories and cotton prices. At major import cotton ports like Qingdao and Zhangjiagang, bonded warehouse utilization rates have risen above 85%, and storage costs have edged up. This will translate into higher raw material holding costs for mills in the next one to two months.
For the yarn sector, the influx of imported cotton will temporarily cap the upside for domestic cotton prices. The price gap between Xinjiang cotton and imported cotton may narrow further, forcing inland mills to become more flexible in raw material selection—for example, increasing the blending ratio of Indian or Brazilian cotton to hedge cost pressures.
Downstream weaving and garment enterprises need to watch for a potential risk: if mills cut yarn prices to clear inventory after the concentrated arrival of imported cotton, it will squeeze profit margins for grey fabrics and finished fabrics. For foreign trade companies with long order cycles, this means they need to build greater raw material fluctuation flexibility into their quotations.
Differentiated Reactions Across Industrial Clusters
The reliance on imported cotton varies significantly across textile clusters. In coastal export-oriented clusters like Nantong and Shaoxing, the proportion of imported cotton usage is generally above 40%. The recent import surge has directly lowered their raw material procurement costs. In contrast, inland clusters dominated by Xinjiang cotton, such as parts of Henan and Hubei, face increased pressure to sell local cotton.
A medium-sized weaving mill owner in the Shengze area told the Texcircle editorial team that his company had locked in some imported cotton orders in June, with hedging costs falling about 1.2 percentage points from the first quarter. This suggests that enterprises are becoming more proactive in anticipating exchange rates and price spreads.
Key Variables for the Second Half
Looking ahead, three factors will determine whether the import momentum continues:
- Global cotton production estimates: The July USDA report raised production forecasts for India and Brazil, keeping international prices under pressure.
- Domestic reserve cotton release policy: If the state increases reserve releases, it could partially replace import demand.
- RMB exchange rate trend: If the yuan depreciates, import costs will rise, dampening subsequent purchase intentions.
In summary, the high import growth in the first half is a done deal. But whether monthly imports can maintain above 100,000 tons in the second half depends on how these variables evolve. Textile enterprises should avoid blindly chasing volume and instead tie import procurement more tightly to order cycles.