China's cotton imports surged 3-fold year-on-year in June 2026, but edged down 2.7% month-on-month, reflecting a tug-of-war between a wide domestic-foreign price spread and slow mill buying during the off-season. More notably, the import mix underwent a dramatic shake-up: Brazilian cotton's share dropped 18 percentage points, while Australian cotton's share jumped to 28% from near zero. This structural shift signals deeper adjustments in global cotton trade flows.
Price Spread Drives Imports, But Off-Season Effect Emerges
Customs data show June imports reached 110,000 tons, up 3-fold year-on-year but down 2.7% from May. First-half imports totaled 935,000 tons, up 1-fold. The domestic-foreign price gap remained around 3,000 yuan/ton, with continued use of sliding-quota tariff allowances being the key driver. The low base effect from last year's tariff impact (a 20-year low of 27,000 tons in June 2025) amplified the year-on-year surge.
The month-on-month decline reveals cautious restocking by mills. While overseas autumn/winter replenishment boosted yarn and fabric orders, domestic mills remained hesitant, suggesting that sustained import growth may face headwinds despite the price window.
Brazilian Cotton Loses Share as Australian Cotton Gains
The import source structure shifted sharply in June. Brazilian cotton arrivals fell 32.2% month-on-month to 44,100 tons, with its share dropping 18 percentage points to 40%. The price increase was the main culprit: Brazilian cotton averaged $1,669/ton, up 3.3% month-on-month, eroding its cost advantage. US cotton similarly saw volume-price divergence, with arrivals down 28.1% to 17,900 tons and prices up 9.2% to $2,026/ton, the highest among all origins.
Australian cotton emerged as the biggest winner. June arrivals surged 22-fold month-on-month to 30,600 tons, with its share jumping 98 percentage points to 28%. The price of Australian cotton averaged $1,927/ton, down 1.1% month-on-month, making it highly competitive amid rising US and Brazilian prices. For buyers, this underscores the value of diversifying sources to hedge against single-market price spikes.
Exports Confirm Demand Logic, But Supply Pressure Looms
June textile and apparel exports reached $29.27 billion, up 14.3% month-on-month and 7.2% year-on-year, driven by overseas autumn/winter replenishment. First-half exports totaled $145.96 billion, up 1.4%, showing overall resilience.
However, the supply side is signaling easing. The USDA July report forecasts global 2026/27 production up 2.613 million tons, with increases in Brazil, US, Turkey, and Central Asia. Ending stocks are slightly up, pushing the stock-to-use ratio to 58.4%. Brazil's cotton growers association data confirms the trend: Brazil exported 3.219 million tons in the first 11 months of the 2025/26 season, up 18.9%. China remains the top buyer, purchasing 767,000 tons, or 24% of Brazil's total.
This means that behind the short-term import surge, long-term supply pressure is building. Once the price gap narrows or demand weakens, imports could face a rapid correction.