Cotton Imports Surge 294%: Spinning Mills Enter a New Phase of Raw Material Strategy

A nearly threefold year-on-year surge in monthly cotton imports is enough to make any textile professional recalculate their numbers. According to the latest trade statistics from the General Administration of Customs, China imported about 110,000 tons of cotton in June 2026, flat from May but up 294.9% from a year earlier. More striking is the first-half cumulative figure: total imports reached about 940,000 tons from January to June, a 102.2% year-on-year increase.

The Logic Behind the Import Surge

This import wave is not a sudden event. From September 2025 to June 2026, cumulative imports stood at about 1.44 million tons, up 51.6% year-on-year, indicating a trend that has persisted for nearly three quarters. The core driver is the widening price spread between domestic and international cotton. In the first half of 2026, global cotton prices were suppressed by expectations of higher production, while domestic cotton remained firm due to Xinjiang cotton consumption policies and relatively low reserve inventories. Imported cotton arrived at a discount of RMB 1,500 to 2,000 per ton compared to domestic cotton. For spinning mills, a cost gap of over RMB 1,000 per ton can determine whether an order is profitable.

The timing of quota policy also played a key role. The 2026 sliding-duty quota was issued intensively in the second quarter, and pressure from processing trade quota deadlines prompted importers to clear customs in June. The fact that June imports matched May levels indicates this is not a one-time pulse but a steady alignment of quota usage and commercial procurement.

Ripple Effects Along the Chain

Such a massive influx of imported cotton first impacts the domestic cotton spot market. Commercial inventories in China have fallen rapidly from their early-2026 highs, and imported cotton has partially relieved mills' supply tightness, but it has also slowed destocking of domestic cotton. Ginning factories in Xinjiang are seeing slower-than-usual sales, and some have begun lowering offers to attract orders.

The downstream yarn market has reacted more directly. The price advantage of imported cotton has transmitted to the cotton yarn side, with 32s carded yarn prices softening in June, forcing some small and medium mills to follow the decline. However, large mills with locked-in low-cost imported cotton enjoy greater pricing flexibility when taking orders. This divergence is reshaping the competitive landscape—large mills with import quotas and strong capital are further consolidating their cost advantage, while small mills relying on domestic cotton face margin compression.

For the international cotton market, robust Chinese import demand provides a key bottom support. In the first half of 2026, China's share of global cotton trade flows increased significantly, with arrivals of Brazilian and U.S. cotton hitting new highs for the period. International cotton merchants now view Chinese procurement as a critical variable for cotton prices in the 2026/27 season; any slowdown in Chinese imports could trigger a correction in international prices.

Practical Recommendations

For Procurement Teams - The current price advantage of imported cotton still exists, but be alert to the risk of narrowing spreads after the fourth quarter when quotas tighten. Lock in forward shipments during July–September as a key window. - Include price adjustment clauses in purchase contracts to hedge against cost volatility if the spread suddenly narrows. - Monitor the switching point between domestic and imported cotton; when domestic cotton discounts imported cotton by more than RMB 500 per ton, consider shifting procurement.

For Textile Mills - Use the cost advantage of imported cotton to lock in raw material costs for third-quarter export orders, preventing later cotton yarn price fluctuations from eroding margins. - Optimize the cotton blend by increasing the proportion of imported cotton to 30%–40% to lower overall raw material costs. - Closely monitor the efficiency of sliding-duty quota usage to avoid passive cost increases from unused quotas.