China's cotton imports in the first half of 2026 more than doubled year-on-year, with June alone reaching nearly four times the volume of the same month last year. According to the latest data from the General Administration of Customs, June imports stood at approximately 110,000 tons, a staggering 294.9% increase over June 2025. Cumulative imports for January–June totaled about 940,000 tons, up 102.2% year-on-year. Behind these numbers lies a structural shift in the supply-demand logic of the textile chain.
Three Drivers Behind the Import Surge
The surge is not the result of a single factor. For the 2025/26 season (September 2025 to June 2026), cumulative imports reached about 1.44 million tons, up 51.6% year-on-year, indicating that the growth trend was already established in the second half of last year. However, the pace accelerated markedly in 2026, with first-half imports doubling and June nearly tripling.
The first reason is the persistent narrowing—and occasional inversion—of the domestic-international cotton price spread. International cotton prices have strengthened on expectations of lower output from major producers, while China's reserve cotton releases have been steady, making imported cotton more cost-effective. Textile mills, focused on cost control, have increasingly substituted imported cotton for domestic supply, a shift that concentrated in the first half of 2026.
The second reason is the recovery signal from downstream orders. Despite lingering external trade uncertainties, some overseas brands and retailers have begun stocking up for the autumn/winter season, with inquiries and orders for cotton goods notably higher than in the same period of 2025. Export-oriented mills need to lock in raw material inventories early to avoid cost spikes from late-stage concentrated purchasing.
The third reason is the expectation of tighter domestic supply. The 2025 Xinjiang cotton region suffered adverse weather, reducing output by an estimated 5%–8%, while acreage in inland areas continued to shrink. The market generally expects a phase of high-quality cotton shortage before the 2026/27 new crop arrives, making early imports a rational hedge.
The Signal of Month-on-Month Flatness
A notable detail is that June imports were flat month-on-month, breaking the incremental trend of the previous months. This does not signal weakening import momentum but likely reflects normal adjustments in port clearance schedules and shipping arrivals. Historically, June–July is the peak season for international cotton arrivals, so flatness suggests smooth import channels without major logistics bottlenecks.
However, for textile mills, the flatness carries a hidden risk: if overseas orders fail to accelerate in the second half, the accumulated import inventory will tie up working capital. Spinning margins are already thin, and raw material turnover efficiency is critical to cash flow health.
Impact Across the Chain
For upstream ginners and traders, sustained high imports cap the upside for domestic cotton prices. The influx of foreign cotton creates competitive supply in the spot market, dampening the pricing power of Xinjiang cotton. Basis quotes for Xinjiang cotton have recently softened, with some traders cutting prices to clear stocks.
For midstream spinners, greater raw material choice is a double-edged sword. Imported cotton offers price and quality advantages, but purchasing it involves currency risk and longer transit times. Moreover, some downstream clients specify Xinjiang cotton, limiting the substitution ratio.
For downstream weavers and garment makers, the import surge helps stabilize fabric costs in the short term. However, given the 3–4 month lead time from cotton to finished goods, the cotton imported now will hit the market as finished products in Q4 2026. If final consumption disappoints, the entire chain could face destocking pressure.