The persistent high price gap of around 3,000 yuan per ton between domestic and international cotton markets drove China's cotton imports to 110,000 tons in June 2026, a threefold year-on-year increase. However, a slight 2.7% month-on-month decline reflects a slowdown in mill purchasing amid the domestic textile off-season. Behind this data lies a significant shift in import sources: Brazilian cotton lost market share due to price increases, while Australian cotton surged on stable pricing.
Rising Import Prices and Structural Shifts
The average import price rose 6.2% month-on-month to $1,804 per ton, driven by bearish global new-season inventory expectations and drought in major US cotton regions. US cotton saw the steepest price increase, up 9.2% to $2,026 per ton; Brazilian cotton rose 3.3% to $1,669 per ton; while Australian cotton fell 1.1% to $1,927 per ton, the only major source to decline.
Price changes directly impacted import shares. Brazilian cotton imports dropped 32.2% month-on-month to 44,100 tons, with its share sliding from 58% in May to 40%, an 18-percentage-point decline. In contrast, Australian cotton imports surged 22-fold to 30,600 tons, boosting its share from near zero to 28%, a 98-percentage-point jump. US cotton imports fell 28.1% to 17,900 tons, with a share of 16%.
- Brazilian cotton: price up 3.3%, imports down 32.2% MoM, share down 18 ppts
- Australian cotton: price down 1.1%, imports up 22x MoM, share up 98 ppts
- US cotton: price up 9.2%, imports down 28.1% MoM, share down 6 ppts
This structural adjustment suggests mills prioritize cost-effectiveness during off-season buying. Australian cotton's price advantage made it a key substitute for Brazilian cotton. For buyers, this means closer monitoring of regional price spreads to optimize procurement.
Trade Modes and End Demand Signals
By trade mode, goods in special customs supervision zones remained the largest category at 43,000 tons (39% share), down 4 ppts. Bonded warehouse imports fell 12 ppts to 33%. Notably, general trade imports rose 1.4% MoM, gaining 12 ppts to 19%, possibly indicating some mills shifting to direct production use.
On the demand side, the start of autumn/winter overseas ready-to-wear orders boosted China's textile and apparel exports by 14.3% MoM to $29.27 billion in June, up 7.2% YoY. Apparel exports rose 21% MoM, while textile exports grew 7.4% MoM. This external demand recovery supports cotton imports, but domestic off-season constraints capped further monthly growth.
Globally, the USDA July report for 2026/27 projects a sharp 26.13-million-ton increase in world cotton production, mainly from Brazil, the US, Turkey, and Central Asia. Despite lower beginning stocks, higher output lifts ending stocks slightly, pushing the stocks-to-use ratio to 58.4%. This supply glut could pressure import prices and further reshape sourcing patterns.