Exports have risen for three consecutive months, hitting a yearly high in June, while cotton imports doubled and yarn imports grew by over half in H1. These figures paint a complex picture of a recovering external demand amid raw material pressure.
Price and Imports: Signals from Narrowing Gap
In July 2026, domestic cotton prices consolidated narrowly while international prices rose, significantly narrowing the price gap. A narrower gap usually reduces import attractiveness, yet imports surged 103% for cotton and 56% for yarn. This divergence suggests that import growth is driven more by tight domestic supply than by price arbitrage. For buyers, the shrinking cost advantage of imported cotton may compress price differences between imported and domestic yarn, affecting material choices and cost structures.
Export Resilience: Orders Under Peak Season Expectations
Textile and apparel exports have grown for three consecutive months, with June reaching a yearly high. This performance is linked to recovering global demand and the flexibility of domestic supply chains in lead times and variety. Yarn quotes have stabilized, reflecting upstream optimism. However, high growth partly stems from a low base last year, and the duration of restocking cycles in Western markets remains uncertain. For exporters, while order visibility has improved, exchange rate volatility and shipping costs remain key profit variables.
Industry Impact: Strategy Adjustments in Supply-Demand Rebalancing
The coexistence of import surges and export recovery reflects proactive adjustments in global supply-demand rebalancing. Domestic cotton production faces resource constraints, making imports essential. Meanwhile, export growth pushes companies to add value rather than compete solely on price. For upstream ginners and traders, the narrowing price gap demands refined hedging; for spinners, stable raw material costs help lock in margins, but they must monitor the pass-through of price increases to downstream fabrics.