China's cotton import data for June 2026 sends a clear signal: cost-effectiveness is becoming the core lever for importers' decisions. Total imports reached 110,000 tons, surging 3-fold year-on-year due to a low base, but edging down 2.7% month-on-month. More notably, the import source structure underwent a dramatic reshuffle—Brazilian cotton's share plummeted 18 percentage points to 40%, while Australian cotton's share soared to 28% from a negligible level.
Structural Shift: Australian Cotton's Rise and Brazilian Cotton's Retreat
The decline of Brazilian cotton is not due to shrinking demand, but an inevitable result of price transmission. In June, the average import price of Brazilian cotton was $1,669/ton, up 3.3% month-on-month. Combined with a high domestic-foreign price spread of around 3,000 yuan/ton, its cost advantage was significantly weakened. Imports of Brazilian cotton fell 32.2% month-on-month to 44,100 tons, becoming the main drag on total volumes. In contrast, Australian cotton averaged $1,927/ton, down 1.1% month-on-month, standing out in a rising market. Imports surged 22-fold month-on-month to 30,600 tons, and grew 3.8-fold year-on-year. This data shows that when mainstream suppliers raise prices, buyers quickly shift to alternatives, and Australian cotton seized the window with stable prices and quality.
US cotton also faced pressure. Imports fell 28.1% month-on-month to 17,900 tons, with its share dropping to 16%. The average price of US cotton was $2,026/ton, up 9.2% month-on-month, the highest increase among all sources, directly curbing buying appetite. A lower global new-crop inventory forecast and drought in major US cotton-producing areas were the two main drivers behind the price hike.
Trade Modes and End Demand: General Trade Share Rebounds, External Demand Warms
Changes in import trade modes also reflect market sentiment. Goods under customs special supervision areas remained the largest category at 43,000 tons, but its share fell 4 percentage points to 39%. General trade imports rose 1.4% month-on-month to 21,000 tons, with its share increasing 12 percentage points to 19%. The rebound in general trade suggests that some companies are directly importing for production rather than using bonded channels for arbitrage or stockpiling, indicating increased confidence in future demand.
This confidence stems from a tangible recovery in external demand. In June, the overseas autumn-winter garment preparation cycle began, boosting orders for yarn and grey fabric. China's textile and apparel exports reached $29.27 billion, up 14.3% month-on-month and 7.2% year-on-year. Apparel exports alone were $15.75 billion, up 21% month-on-month. First-half cumulative exports were $145.96 billion, up 1.4% year-on-year. The sustained export growth provides downstream support for cotton imports, but mills remained cautious during the traditional off-season, not accelerating procurement aggressively.
Global Supply: The Game Between Production Increases and Inventory Pressure
The USDA July supply-demand report injected new variables. Global cotton production for 2026/27 is projected to increase sharply by 2.613 million tons, with Brazil, the US, Turkey, and Central Asia all expanding output. Ending stocks are slightly higher, pushing the stocks-to-use ratio to 58.4%. This indicates a looser global supply picture for the new season. However, the 2025/26 stocks-to-use ratio has already fallen to 63.1%, reflecting a tighter current year. Data from the Brazilian Cotton Growers Association shows that Brazil exported 3.219 million tons in the first 11 months of 2025/26, up 18.9% year-on-year, with China remaining the largest buyer, purchasing 767,000 tons cumulatively.
For importers, short-term prices are supported by tight stocks and weather speculation, but medium-term production increases may cap gains. The average import price in June was $1,804/ton, up 6.2% month-on-month, but still down 8.6% year-on-year, indicating that current prices have not yet returned to last year's highs.