China's cotton import market is undergoing a dramatic structural reshuffle. In June 2026, Australian cotton arrivals surged 22 times month-on-month, capturing a 28% share, while Brazilian cotton's share plunged 18 percentage points to 40%. This shift, driven by price competitiveness and seasonal procurement patterns, signals a fundamental reset in textile mills' sourcing strategies.
Price Gap Drives Import Surge
China Customs data shows June cotton imports at 110,000 tons, down 2.7% month-on-month but up 300% year-on-year. The direct driver is the persistent domestic-international price gap of around 3,000 yuan/ton, coupled with continued use of sliding-duty quotas. The low base effect from last year's tariff-induced slump (27,000 tons, a 20-year low) also amplifies the comparison.
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%. These figures underscore strong import demand inelasticity, with the price gap not diluted by volume growth.
Brazilian Cotton Loses Ground, Australian Cotton Rises
The import source shift is the most analytically significant signal. Brazilian cotton imports fell 32.2% month-on-month to 44,100 tons, with share dropping from 58% in May to 40%. The reason is straightforward: Brazilian cotton prices rose 3.3% month-on-month to $1,669/ton, eroding its cost advantage. In contrast, Australian cotton prices edged down 1.1% to $1,927/ton, making it the most cost-effective alternative.
US cotton, despite the largest price increase (up 9.2% to $2,026/ton), saw only a 6-percentage-point share decline to 16%, indicating persistent demand from high-end orders. Overall, import cotton average prices rose to $1,804/ton, up 6.2% month-on-month, driven by global new-season inventory drawdown expectations and drought in US growing regions.
Trade Patterns Reveal Real Demand
By trade mode, special customs supervision zone logistics goods remained the largest category at 43,000 tons, but share fell 4 percentage points. General trade share rose 12 percentage points to 19%, a notable shift: higher general trade share means more cotton enters domestic processing directly, rather than sitting in bonded warehouses. This may correlate with downstream order recovery and proactive inventory building.
Processing trade accounted for only 9%, down 5% month-on-month, indicating export-oriented orders still rely less on imported cotton. This corroborates that current textile and apparel export growth is more driven by domestic cotton or blended fibers, not pure cotton processing.
Overseas Demand Recovery vs. Global Supply Ease
June textile and apparel exports reached $29.27 billion, up 7.2% year-on-year and 14.3% month-on-month. Apparel exports grew 21% month-on-month, confirming the overseas fall/winter restocking cycle has started. However, global supply is not tight: the USDA July report raised 2026/27 global cotton production by 2.613 million tons, with ending stocks-to-use ratio rising to 58.4%. Brazil's cotton growers association data shows 2025/26 season exports through November at 3.219 million tons, up 18.9% year-on-year, with China purchasing 767,000 tons (24% share).
This means despite strong short-term import data, the medium-to-long-term global supply surplus will cap price gains. Textile mills should not chase short-term price spikes.
Price Outlook and Procurement Windows
Import cotton average price of $1,804/ton is still down 8.6% year-on-year, indicating it remains at historically low levels. But Brazilian and US cotton prices are trending up, with Australian cotton the only stable-quality option. For mills with reliable Australian supply channels, this is a window to lock in long-term contracts.