In the first half of 2026, China's cotton yarn imports surpassed the 1 million ton mark, reaching 1.05 million tons, a year-on-year surge of 56.3%. June alone saw 170,000 tons imported, flat month-on-month but up 54.2% year-on-year. These customs figures reveal not just volume growth but an accelerating structural adjustment in the domestic textile chain's raw material sourcing.
The Supply-Demand Imbalance Behind Import Volumes
The half-year import volume of 1.05 million tons indicates China's rising dependence on foreign cotton yarn. With cumulative imports for the 2025/26 season (Sept 2025 to June 2026) reaching 1.64 million tons, monthly imports have stabilized above 160,000 tons—well above pre-pandemic levels. This reflects a clear gap between domestic spinning capacity and downstream demand.
On the supply side, domestic cotton prices remain persistently higher than international benchmarks, eroding the cost competitiveness of Chinese-made yarn. Although Xinjiang's production capacity is expanding, quotas and transport costs limit its reach. Mills in Vietnam, India, and Pakistan maintain advantages in raw material and labor costs, further squeezing domestic spinners.
Signals from Import Structure Changes
The import surge is not uniform across categories. The share of high-count and combed yarns is rising, indicating that downstream weavers prioritize quality over cost. Under the "fast fashion" and "small batch" trends, buyers prefer stable imported yarns over volatile domestic supply from small mills.
Regionally, Southeast Asian yarns dominate. Vietnam remains the top source due to geographic proximity and trade agreements, while Indian yarns, especially in low-count segments, directly substitute domestic products. This trend pressures small and medium spinners in the Yellow River and Yangtze River basins, likely accelerating capacity consolidation.
Transmission to Weaving and Garment Sectors
The influx of imported cotton yarn is a double-edged sword for weaving mills. On one hand, broader sourcing options and lower costs boost the export competitiveness of greige and finished fabrics. On the other, the 2-4 week lead time for imports challenges quick-response orders. Some mills adopt a "imported yarn + domestic cotton" hybrid strategy to balance cost and delivery.
For trading companies, higher import yarn usage complicates raw material traceability. Persistent Western scrutiny over Xinjiang cotton makes imported yarn a de facto requirement for some export orders. This partly explains why import volumes remain high despite a large base—economic factors are intertwined with trade compliance.
Practical Recommendations
For Procurement Teams - Monitor price spreads between Vietnamese and Indian yarns; Southeast Asian yarns currently offer advantages, but watch for currency risks and shipping delays. - Build dual-source supplier bases for domestic and imported yarns, prioritizing imports for high-count orders and maintaining domestic backups for standard items. - Use cotton yarn futures to hedge forward procurement costs, especially against potential price rebounds in H2 2026.
For Foreign Trade Enterprises - Specify raw material origins in export contracts to avoid rejection due to Xinjiang cotton controversies. - Establish direct links with Southeast Asian mills to reduce intermediary costs. - Monitor China's cotton import quota release schedule in Q4 2026, as it directly impacts domestic-international price spreads and import yarn competitiveness.
In summary, the 54% year-on-year surge is not a short-term spike but a symptom of deep structural adjustment in China's cotton textile chain. For industry participants, accepting and adapting to this new reality of high import dependency is more pragmatic than trying to reverse the trend.