In the first ten months of the 2025/26 marketing year, China's cumulative cotton imports reached 1.4148 million tons, up 52.58% year-on-year. However, behind this figure, clear signs of slowing growth are emerging—June monthly imports declined sequentially, and the industry is generally cautious about exceeding 1.6 million tons for the full year. The waning import momentum is not due to shrinking demand but is a combined result of policy and trade environment factors.
Three Signals Behind the Data
According to customs statistics, imports from January to June 2026 totaled 934,700 tons, a year-on-year surge of 103.19%, far exceeding the annual average growth rate. The rush to import in the first half is evident, but the pace has noticeably slowed in the second half. The central reserve cotton sales launched on July 20, primarily offering 2019-2021 US and Brazilian cotton, directly substitute port-bonded cotton, compressing the space for prompt purchases.
Meanwhile, the remaining 2026 cotton import quotas (including 1% tariff and sliding duties) are tightening. Textile mills and traders are becoming more cautious, prioritizing quotas for Brazilian cotton shipments scheduled for September-November. This means that even if demand exists in the second half, purchases may be delayed or reduced due to quota shortages.
High-Grade Cotton Gap and Tariff Game
Since mid-July, 2025/26 Australian cotton has arrived in batches, but high basis levels have not alleviated the tight supply of high-grade, high-quality cotton. Textile mills still have orders for high-count yarns and high-density fabrics, but their raw material options are squeezed—either accept high basis or wait for reserve sales. This deadlock directly curbs order intentions.
A more profound impact comes from Sino-US trade relations. In late July, the US imposed 301 tariffs, and discussions on a reciprocal tariff reduction framework involving $30 billion each made no concrete progress, heightening risk aversion among Chinese enterprises in purchasing US cotton. As a major source of high-grade cotton, the slowdown in US cotton purchases further exacerbates the supply structure imbalance.
Transmission to Industrial Clusters and Procurement Strategy Adjustments
The peaking of import growth has dual effects on domestic cotton industrial clusters. Xinjiang cotton regions benefit from import substitution, but inland textile clusters such as Shandong and Henan face dual pressure from quota shortages and high-grade cotton premiums. For spinning mills relying on imported cotton, cost control pressure has intensified, prompting some to adjust product mixes toward medium-count yarns or blends.
For traders, the value of quotas has risen, giving holders stronger bargaining power. But risks remain—if Sino-US tariff policies turn around and US cotton purchases resume, quota premiums may fall. Therefore, flexible management of quota usage becomes key to second-half operations.
Practical Recommendations
For Buyers - Prioritize locking in Brazilian cotton for September-November shipments, using existing quotas to secure supply and avoid later shortages. - Monitor the pace of reserve cotton sales; if daily listings increase, reduce prompt import dependence to lower costs. - Stay cautious on high-grade Australian cotton, waiting for basis corrections before ordering to avoid chasing highs.
For Foreign Trade Enterprises - Include raw material price linkage clauses in export contracts to hedge against cotton price fluctuations. - Closely track Sino-US tariff negotiations; if a tariff reduction framework materializes, plan US cotton purchases early to gain price advantages. - Diversify sourcing channels, evaluating West African and Central Asian cotton for cost-effectiveness, reducing reliance on single sources.
The peaking of import growth does not mean calm in the cotton market. Quotas, reserve sales, and tariffs are intertwined, reshaping China's cotton import landscape. For every link in the chain, precisely grasping policy rhythms is more important than predicting total volumes.