China imported 940,000 tons of cotton in the first half of 2026, up 102% year-on-year, with June alone reaching 110,000 tons—a nearly 300% surge. This explosive growth is not an isolated event but a convergence of price advantages, geopolitical order shifts, and tariff uncertainties.
Price Inversion Drives Import Surge
In June, ICE cotton futures hit two lows—75.17 and 75.50 cents per pound—widening the cost gap between imported cotton (under 1% tariff) and domestic Xinjiang cotton. For mills, this translated into hundreds of yuan savings per ton, directly stimulating purchasing. Brazilian and US cotton remained dominant, reflecting the textile industry's rigid demand for high-quality foreign fiber, especially for high-count yarns and premium fabrics. As long as the price inversion persists, import volumes are unlikely to decline.
Middle East Conflict Spurs Order Reshoring
The ongoing Middle East war disrupted Southeast Asian textile supply chains, with factories in Vietnam and Bangladesh facing order fulfillment challenges. From May to July, a significant volume of cotton product orders from the EU, US, Japan, and South Korea shifted back to China, landing in coastal clusters like Guangdong, Jiangsu, Zhejiang, Fujian, and Shandong. These traceability orders—requiring non-Xinjiang cotton—amplified demand for imported fiber, filling capacity gaps left by weak Western demand.
Pre-Tariff Rush Amid Trade Uncertainty
July marked a window for potential US tariff adjustments under Section 301, while EU-China trade tensions also simmered. To hedge against tariff hikes, Chinese textile firms rushed exports to Western markets in May and June, coinciding with retailers' peak restocking for the fall season. This double push created an abnormal spike in import data. Industry insiders believe such a pulse is unsustainable—once tariff policies clarify or the rush window closes, imports will normalize.
Industry Transmission and Outlook
The influx of imported cotton pressures domestic prices, slowing Xinjiang cotton sales. Ginners and traders face growing destocking pressure, while mills gain more flexible raw material sourcing but also grapple with logistics, exchange rate, and quota risks. Key indicators to watch include ICE price trends, Southeast Asian supply chain recovery speed, and Sino-US/EU tariff negotiations. A longer-term trend is China's structural rise in import dependence, driven by the Xinjiang cotton ban and global supply chain regionalization.