In June 2026, China imported 110,000 tons of cotton, up 3-fold year-on-year but down 2.7% month-on-month, as the average import price rose 6.2% to $1,804/ton. The price increase was driven by global carry-in stock reduction and drought in major US cotton regions. The most striking shift was in sourcing structure: Brazilian cotton's share dropped 18 percentage points to 40%, while Australian cotton surged from negligible to 28% of total imports.
Price Divergence Reshapes Sourcing Strategy
US cotton averaged $2,026/ton in June, up 9.2% month-on-month; Brazilian cotton rose 3.3% to $1,669/ton; Australian cotton fell 1.1% to $1,927/ton, becoming the only source with declining prices. This divergence prompted Chinese buyers to pivot toward Australian cotton, whose stable quality and competitive pricing filled the gap left by pricier Brazilian cotton.
Australian cotton imports hit 30,600 tons in June, a 22-fold month-on-month surge. The shift was facilitated by smooth logistics and stable Australian output. General trade's share of imports rose 12 percentage points to 19%, indicating that more mills are locking in Australian supply through regular channels rather than bonded zones.
External Demand Recovery vs. Domestic Off-Season
Textile and apparel exports reached $29.27 billion in June, up 14.3% month-on-month, with apparel exports growing 21%. The overseas autumn/winter ordering season boosted yarn and fabric demand. However, the domestic market remained in traditional off-season, causing mills to slow purchasing. This mismatch requires careful inventory management: firms must balance pre-stocking for export orders against the risk of holding excess inventory during a slow domestic period.
Global Supply Outlook
The USDA July report raised 2026/27 global cotton production by 2.613 million tons, with increases in Brazil, the US, and Turkey. However, lower beginning stocks pushed the stocks-to-use ratio to 58.4%. Brazilian cotton exports for 2025/26 reached 3.219 million tons in the first 11 months, up 18.9% year-on-year, with China still the largest buyer at 767,000 tons. This suggests Brazil's market share loss is temporary and price-driven; if Brazilian prices ease, its share could quickly recover.