In June 2026, China's cotton imports surged 3x year-on-year but fell 2.7% month-on-month to 110,000 tons, signaling a dual shift in procurement pace and source structure. The most striking change is the rapid rise of Australian cotton at the expense of Brazilian cotton, as price dynamics reshape mill sourcing maps.
Import Volume and Price Spread Logic
The domestic-foreign cotton price spread remains high at around 3,000 yuan/ton, driving the year-on-year import surge. The continued use of sliding-quota tariffs gives imported cotton a significant cost advantage over domestic supplies. However, the month-on-month decline reflects mills' caution during the traditional low season—slower buying, not collapsing demand. First-half imports reached 935,000 tons, doubling year-on-year, suggesting annual imports could hit a new record.
Structural Shift: Australian Cotton Rises, Brazilian Cotton Under Pressure
The June data reveals dramatic changes in source shares. Brazilian cotton imports fell 32.2% month-on-month to 44,100 tons, with its share dropping from 58% to 40%—a loss of 18 percentage points. The direct cause: Brazilian cotton prices rose 3.3% month-on-month to $1,669/ton, eroding cost competitiveness. Meanwhile, Australian cotton prices fell 1.1% to $1,927/ton, with imports surging 22x month-on-month to 30,600 tons, capturing 28% share from near zero.
This shift means Australian cotton is breaking the monopoly Brazilian cotton held over the past two years. US cotton imports fell 28.1% to 17,900 tons, with a 16% share, as its $2,026/ton price proved prohibitive. Diversification reduces single-origin risk but requires mills to build more flexible price tracking and procurement decision-making systems.
Trade Modes and Price Transmission
Special customs supervision zone logistics goods still lead at 43,000 tons, but general trade share rose 12 percentage points to 19%, indicating some mills are directly importing for production rather than relying on bonded flows. This shift is driven by a 6.2% month-on-month rise in average import prices to $1,804/ton, with US and Brazilian cotton leading the increase.
Globally, the USDA July report raised 2026/27 production by 2.613 million tons, with increases in Brazil, the US, and Turkey, pushing the ending stock-to-use ratio to 58.4%. This signals a medium-term supply glut, but short-term drought in US cotton regions supports prices. ABRAPA data shows Brazil exported 3.219 million tons in the first 11 months of 2025/26, with China as the top buyer at 24%, but Bangladesh and Turkey are catching up.
Downstream Demand and Industry Transmission
June textile and apparel exports reached $29.27 billion, up 7.2% year-on-year and 14.3% month-on-month, driven by overseas autumn/winter stocking. Yarn and gray fabric orders improved, but cautious mill buying suggests a lag in inventory transmission. The changing import structure will directly affect yarn cost curves—mills using Australian cotton may gain more stable cost control, while those relying on Brazilian cotton face price volatility.