China's cotton import market is undergoing a quiet structural reshuffle. Latest customs data show June 2026 imports of 110,000 tons, up 3x year-on-year but down 2.7% month-on-month. While the headline figure reflects a low base effect, the deeper story is a shift in procurement logic: Brazilian cotton's share plunged from 58% to 40%, while Australian cotton surged from below 2% to 28%. This is not seasonal noise but a clear signal that the value-for-money calculus has flipped.
Imports stay high, but momentum diverges
First-half cumulative imports reached 935,000 tons, up 100% year-on-year; the 2025/26 season's first ten months totaled 1.415 million tons, up 52.6%. The surge is driven by a persistent domestic-foreign price spread of around 3,000 yuan/ton and continued use of sliding-duty quotas. But the month-on-month decline in June reminds the market that mill purchasing is shifting from 'grabbing quotas' to 'selecting varieties'.
More telling is the average import price rising 6.2% month-on-month to $1,804/ton, with US and Brazilian cotton up 9.2% and 3.3% respectively, while Australian cotton edged down 1.1%. The widening spread directly reshaped decisions: Australian arrivals jumped 22x month-on-month, while Brazilian fell 32.2%.
Australian cotton's rise: price stability wins
Australian cotton's price held steady or fell slightly to $1,927/ton, only 15% above Brazilian cotton, but mills pay for certainty. June arrivals hit 30,600 tons, a 28% share, up 98 percentage points from May. This reflects two consecutive bumper Australian harvests and optimized export channels to China.
Brazilian and US cotton face a 'price-hike-lose-market' dilemma. Brazilian cotton averaged $1,669/ton, up 3.3% month-on-month but still down 2.8% year-on-year, losing its value edge to Australian cotton. US cotton at $2,026/ton, up 9.2% month-on-month and 10.3% year-on-year, remains high-end but supply is disrupted by drought.
Trade mode shifts hint at channel restructuring
General trade's share jumped from 7% to 19%, up 12 percentage points month-on-month, while bonded warehouse trade fell 12 points. This means more cotton flows directly into domestic circulation rather than staying in special zones. For mills, a higher general trade share means greater procurement flexibility but also increased price risk.
External demand recovery vs supply outlook
June textile and apparel exports reached $29.27 billion, up 7.2% year-on-year and 14.3% month-on-month, driven by autumn-winter restocking. But the global supply outlook is bearish: USDA's July report lifted 2026/27 world production by 2.613 million tons, raising the stocks-to-use ratio to 58.4%.
Brazil's ABRAPA reports that in the first 11 months of 2025/26, Brazil exported 3.219 million tons of cotton, up 18.9% year-on-year. China remains the top buyer at 767,000 tons, but its share fell to 24%. Bangladesh and Turkey are absorbing growing volumes, diversifying Brazil's export destinations.
For buyers: lock in Australian cotton basis
Australian cotton offers price stability and ample supply. Buyers should lock in forward contracts when the basis is low. Brazilian cotton may see price corrections as new-crop supply hits in Q4; wait for that window. US cotton remains volatile due to weather and currency; use hedging.