When the year-on-year growth of cotton imports hit 71.1% in a single month, the market's focus shifts from the numbers themselves to the restocking pace and price expectations behind them. According to data from the General Administration of Customs, China imported approximately 90,000 tons of cotton in July 2026, down 20,000 tons month-on-month but up 71.1% year-on-year. Cumulative imports from January to July reached 1.03 million tons, an increase of 98.7% compared to the same period last year. For the 2025/26 season (September-August), imports totaled 1.53 million tons through July, up 53% year-on-year. These figures outline a clear trajectory of surging imports and signal a rebalancing of the domestic cotton supply-demand landscape.
The Logic Behind the Data
The month-on-month decline of 20,000 tons suggests a slight easing, but the year-on-year near-doubling indicates a low base last year and a front-loaded import schedule this year. The cumulative increase of nearly 100% from January to July implies that spinning mills have concentrated their quota usage in the first half of the season. This is linked to a widening domestic-international price spread, exchange rate fluctuations, and recovering downstream orders. In industrial clusters such as Shandong and Henan, yarn mills typically maintain 30-45 days of raw material inventory, and imported cotton is being picked up immediately upon arrival, indicating genuine restocking demand.
Transmission and Price Expectations
The surge in imports directly alleviates the shortage of high-grade cotton in the domestic market but also pressures Zhengzhou cotton futures prices. When the landed cost of imported cotton is lower than the spot price of Xinjiang cotton, mills prefer imported fiber, slowing domestic sales and weakening ginners' price support. For international merchants, robust Chinese buying underpins export premiums for US and Brazilian cotton, yet concentrated shipments also raise freight costs. More importantly, the import surge means domestic inventory rebuilding, and the expectation of ample supply in the coming months will cap price upside, prompting mills to shift from panic buying to selective purchasing.
Variables in the Second Half of the Season
With only August remaining in the 2025/26 season, cumulative imports of 1.53 million tons already far exceed last year's total, and breaking 1.6 million tons for the season is almost certain. However, what deserves more attention is the issuance pace of quotas for the 2026/27 season and whether the sliding-scale duty policy will adjust. If new quotas are released early, imports may remain high; otherwise, imports could contract temporarily at year-end. Additionally, the upcoming Northern Hemisphere new crop will influence the domestic-international price spread and alter mills' raw material mix decisions.