In June 2026, China imported 110,000 tons of cotton, a 3x year-on-year surge but a 2.7% month-on-month decline. This apparent contradiction is driven by a persistent domestic-foreign price spread of around 3,000 yuan per ton, coupled with a low base from last year's tariff shock. More striking is the structural shake-up in import sources: Brazilian cotton lost ground, Australian cotton surged, and U.S. cotton led price gains due to drought concerns.
Import Structure Reshuffled: Australian Cotton's Value Play
Brazilian cotton remained the top source at 44,100 tons, but its share plunged 18 percentage points to 40% month-on-month, as its average price rose 3.3% to $1,669/ton, eroding its cost advantage. Meanwhile, Australian cotton imports soared 22x month-on-month to 30,600 tons, capturing 28% share. Its average price edged down 1.1% to $1,927/ton, positioning it as a value alternative amid rising prices elsewhere.
U.S. cotton imports fell 28.1% to 17,900 tons, with a 16% share. Its average price jumped 9.2% to $2,026/ton, the sharpest increase among all origins, driven by drought in key U.S. growing regions. This signals rising cost pressure for mills relying on U.S. cotton for high-count yarns.
Trade Mode and Downstream Linkages: General Trade's Rebound
By trade mode, special customs supervision zone logistics still led at 43,000 tons, but its share dropped 4 percentage points to 39%. General trade imports rose 1.4% to 21,000 tons, with its share climbing 12 points to 19%. The rebound in general trade suggests mills are shifting from bonded stock to direct purchases, indicating acceptance of current price spreads and short-term restocking intent.
Downstream demand provided support. June textile and apparel exports reached $29.27 billion, up 14.3% month-on-month and 7.2% year-on-year, driven by the overseas autumn-winter replenishment cycle. Yarn and grey fabric orders improved, but mill purchasing slowed, suggesting a lag in order transmission as mills prefer to digest inventories or wait for better prices.
Global Supply-Demand Rebalancing: Production vs. Inventory
The USDA July report raised 2026/27 global production by 2.613 million tons, with expansions in Brazil, the U.S., Turkey, and Central Asia. However, lower beginning stocks limited the increase in ending stocks, raising the stock-to-use ratio to 58.4%. This confirms a looser supply outlook but without severe inventory pressure.
Brazilian export data confirms the trend: 2025/26 exports reached 3.219 million tons in the first 11 months, up 18.9% year-on-year, with June alone up 63.4%. China remained the top buyer at 767,000 tons (24% share), but the June import share drop already reflects price sensitivity.
Import cotton prices averaged $1,804/ton in June, up 6.2% month-on-month but still down 8.6% year-on-year, indicating prices remain below last year's peak. However, the upward trend in U.S. and Brazilian prices is already pressuring mill costs.