In March 2026, the scale of domestic cotton imports rose sharply, with imported supplies continuing to flood the domestic market. Coupled with multiple factors such as shifts in planting patterns in major global producing countries, a recovery in domestic downstream demand, and cost pass-through along the supply chain, cotton prices continued to fluctuate but remained firm. This analysis is based on SunSirs’ benchmark prices as of 24 April and the overall market dynamics.

I. Price Trends for Core Products (SunSirs Benchmark Price as of 24 April)

Cotton (Grade 3128)

24 April: 18,225.00 RMB/ton

Compared to 1 April (17,980.00 RMB/ton): +1.36%

Compared to 1 January (17,310.00 RMB/ton): +5.28%

Cotton Yarn (Core Downstream Product of Cotton)

24 April Reference Price: 24,500.00 RMB/ton

Compared to 1 April (24,266.67 RMB/ton): +0.96%

Compared to 1 January (23,300.00 RMB/ton): +5.15%

II. Official Customs Import and Export Data for 2026

According to monthly statistics from the General Administration of Customs, China’s cotton imports in March 2026 reached 289,000 tons, a significant month-on-month increase of 42.8% and a year-on-year rise of 29.4%, marking a monthly import volume that reached a peak for the year to date. Cumulative cotton imports for the first quarter stood at 724,000 tons, representing a year-on-year increase of 21.7%, with a marked upward trend in imports.

III. Key Reasons for the Sharp Increase in Cotton Imports in March

Inverted Domestic-International Price Differential Highlights Cost Advantage of Imports

International cotton prices remained generally lower than domestic market prices, with the price differential between domestic and international cotton persisting at a high level. This provided a clear cost advantage for overseas cotton procurement, opening up arbitrage opportunities for traders. Consequently, they concentrated on booking shipments to replenish stocks, driving a substantial rise in monthly arrivals. Abundant new-crop supply in major global producing regions and ample overseas stock provided the resource foundation for China’s large-scale imports.

Domestic Supply-Demand Gap and Concentrated Restocking Demand

Domestic Xinjiang cotton is entering the final stages of the season, with available spot resources gradually tightening and commercial inventories remaining at low levels. Production activity in the downstream textile industry has been steadily recovering, and the market has relied on imported cotton to fill the supply gap, with downstream spinning enterprises concentrating on purchasing imported cotton to replenish their stocks.

Supply remains ample in major international producing regions, with abundant global stock

Crop conditions and output in the world’s major cotton-producing nations are generally favorable. The United States, Brazil and India have ample stocks from previous harvests, resulting in ample global supply. Export quotations remain stable, and sufficient overseas supply is available to fully meet domestic import orders, supporting a significant increase in monthly import volumes.

IV. Current Planting Patterns in Major Global Production Regions

Regarding global cotton planting, sowing for the 2026 season has gradually commenced in the Northern Hemisphere, with a marked divergence in overall planting structures. In the US cotton-growing regions, sowing is progressing steadily under favourable weather conditions, with planting areas expected to remain stable; in Brazil, the foundation for a bumper crop is solid, with high carryover stocks and ample export supply capacity.

In India’s cotton-growing regions, yield forecasts are subject to fluctuations due to climatic and field management factors, though overall supply remains ample. The global cotton supply remains ample, with overseas markets continuing to provide a stable supply of export goods, ensuring long-term global trade flows whilst simultaneously limiting the scope for significant upward movement in international cotton prices.

V. Logic of Price Transmission Between Upstream and Downstream Sectors

As the source of the industrial chain, cotton imports continue to supplement domestic supply. Domestic cotton prices are fluctuating within a narrow range with a slight upward bias, driven by both increased supply and underlying demand.

Benefiting from stable raw material supplies, the downstream cotton yarn sector has seen a sustained recovery in operating rates. With orders from the apparel and home textiles sectors gradually picking up, essential procurement has supported a steady rise in cotton yarn prices. The increase in cotton prices has been smoothly and moderately passed on to downstream sectors, resulting in a slight rise in costs for downstream weaving enterprises. Profit distribution across the entire industrial chain remains stable, with no significant cost squeeze observed. Downstream enterprises are operating on a ‘buy-as-needed’ basis with low inventory levels, and this essential demand is underpinning the bottom of the cotton price range.

VI. Market Landscape and Outlook

The current cotton market is characterized by ample increases in imported supplies, a steady recovery in domestic demand, a global supply surplus, and prices fluctuating within a narrow range with a slight upward bias. Large volumes of imported cotton are filling the domestic gap and alleviating the tightness of local resources, whilst the price differential between domestic and international markets is limiting the scope for significant price increases.

In the short term, the cotton market is expected to continue its fluctuating yet generally firm trend, with the continued arrival of imported supplies moderating the pace of price increases.

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