The domestic-foreign cotton price gap remained high at around 3,000 yuan per ton, coupled with the start of autumn-winter stocking orders overseas. In June 2026, China's cotton imports surged 3x year-on-year to 110,000 tons. A detail easily overlooked: the month-on-month figure edged down 2.7%, reflecting cautious procurement pace adjustments by cotton mills during the traditional off-season. The average import price rose to $1,804/ton, up 6.2%, driven by dual bullish factors: expectations of lower global new-season cotton inventories and drought in major U.S. cotton-producing regions.
Import Source Restructuring: Australian Cotton's 'Comeback' and Brazilian Cotton's 'Stall'
The dramatic restructuring of import sources in June is the most noteworthy industrial signal in this data. Although Brazilian cotton still ranked first with 44,100 tons imported, it fell 32.2% month-on-month, with its share dropping from 58% to 40%. The direct cause: Brazilian cotton prices rose to $1,669/ton, up 3.3% month-on-month, significantly narrowing its cost advantage. In stark contrast, Australian cotton staged a strong resurgence: imports surged from less than 1,400 tons in May to 30,600 tons, a 22x month-on-month increase, capturing a 28% share, up from just 1%.
The fundamental driver is price divergence. Australian cotton averaged $1,927/ton, down 1.1% month-on-month, contrasting with the upward trends of Brazilian and U.S. cotton. For cotton textile mills with thin margins and high cost sensitivity, this 'stable with a slight decline' pricing strategy is highly attractive. U.S. cotton imports were 17,900 tons, with its share further falling to 16%. Its average price of $2,026/ton rose 9.2% month-on-month—the highest increase among the three major sources—further dampening purchasing appetite.
Price Transmission and Structural Changes in Trade Modes
The impact of rising import prices on downstream industries has begun to show. General trade imports reached 21,000 tons, up 1.4% month-on-month, with its share rising to 19%, an increase of 12 percentage points from May. This indicates that some companies with quotas and financial strength are actively adjusting procurement strategies in response to the decline in imports via bonded supervision places (33% share) and special customs supervision zone logistics goods (39% share). A rising general trade share often signals that companies are more bullish on future cotton price trends, willing to bear more direct tariff costs to lock in supply.
From a global supply-demand perspective, the USDA July report significantly raised the 2026/27 global cotton production forecast by 2.613 million tons, with increases in Brazil, the U.S., Turkey, and Central Asia. While this puts some pressure on long-term prices, in the short term, tight inventory expectations before new crop arrivals and downstream export recovery support the high cotton import prices.
Downstream Export Recovery: A Bright Spot in the Off-Season
In June, China's textile and apparel exports totaled $29.27 billion, up 7.2% year-on-year and 14.3% month-on-month. Apparel exports grew 21% month-on-month, directly confirming the start of the autumn-winter stocking cycle. The recovery in yarn and grey fabric orders is the core driver of cotton import demand. However, it's noteworthy that export growth (7.2%) lags far behind cotton import growth (3x). This implies that the surge in cotton imports is more of a price-gap-driven inventory replenishment than an equal expansion of end-demand.
This 'import surge, export moderate' scissors gap may lead to rising inventory pressure at cotton textile mills over the next 1-2 quarters. If the domestic-foreign price gap narrows or overseas orders slow, high-cost imported cotton inventories could face de-stocking risks.