Cotton stocks at China's major ports are accumulating faster than expected. As of Aug 25, total inventory at Qingdao, Zhangjiagang, Shanghai and other key ports reached 615,000-620,000 tons, up over 110% year-on-year. This figure not only reflects sustained high import arrivals but also signals greater supply pressure in Q4. For textile mills, high inventory means re-evaluating procurement windows, while narrowing price gaps are eroding the cost advantage of imported cotton.
Inventory Structure: Qingdao Dominates, Bonded Stocks High
Geographically, bonded warehouses in Qingdao and surrounding areas (Zibo, Weifang) hold about 545,000-550,000 tons, accounting for nearly 90% of national port stocks. This concentration makes Qingdao the core barometer for China's imported cotton market. Inventory composition: bonded cotton mainly from Brazil, Australia, US, Turkey, West Africa, and Mexico; cleared RMB resources include Brazilian, Australian, Turkish, Kazakh, African (Tanzania, Cameroon, Cote d'Ivoire, Sudan, etc.), Indian, and US cotton.
Notably, the high share of bonded cotton means a large portion of resources has not entered actual circulation. This stems from tight import quotas and fluctuating domestic-foreign price spreads. Mills, unable to obtain quotas, can only watch bonded and shipment cotton, exacerbating port congestion.
Quota Crunch: The Hard Constraint on Imported Cotton Flow
From Jan to Jul 2026, China imported 1.0263 million tons of cotton. Based on this, the remaining 1% tariff and sliding-duty quotas for Aug-Dec are estimated at only about 300,000 tons (including unapplied quotas). Quota scarcity has become the core contradiction in the imported cotton market—even if ports have stock, mills cannot clear customs smoothly. As the window for additional sliding-duty quota issuance gradually closes, prospects for new quotas are bleak.
This policy tightening directly reduces liquidity of imported cotton. For mills, quotas are the "ticket" to access imports; without them, they rely on cleared RMB resources or domestic Xinjiang cotton. This explains why, despite high inventories, bonded cotton transactions remain relatively subdued.
Narrowing Price Gap: Imported Cotton Loses Edge
Recent strong rebound in ICE futures, outpacing Zhengzhou cotton, has sharply narrowed the premium of imported cotton over Xinjiang cotton. For example, on Aug 27-28, bonded Brazilian cotton M 1-5/32 (strength 28/29 GPT) in Qingdao was quoted at 88.5-89.5 US cents/lb. The 1% tariff import cost was 14,785-14,950 yuan/ton (sliding-duty cost 15,160-15,275 yuan/ton). Compared with Xinjiang machine-picked cotton in inland warehouses (Henan, Shandong, Jiangsu), the premium narrowed to 3,300-3,700 yuan/ton.
A narrower premium reduces the price advantage of imported cotton, prompting some mills to shift toward Xinjiang cotton. However, Xinjiang supply is not unlimited—reserve cotton from 2019-2021 crop years, though lower grade, has good length, strength, and micronaire, substituting for port cotton from 2023/24-2025/26. This substitution further suppresses destocking of port cotton.
Concentrated Arrivals: Stocks May Exceed 700,000 Tons
Shipping schedules show large volumes of Australian cotton for Jul/Aug/Sep and Brazilian cotton (2025/26 new crop) for Sep/Oct/Nov. Combined with Central Asian, Mexican, Argentine, African, and Turkish cotton, port stocks are likely to keep rising, potentially breaking 650,000 or 700,000 tons.
For textile enterprises, this means more abundant imported cotton options in Q4, but also price downside risk from inventory buildup. Given quota constraints, actual usable imports remain limited, requiring a balance between "procurement within quota" and "waiting for better timing."