In March 2026, the state officially issued a sliding-scale tariff on cotton imports and a 300,000-ton quota for processing trade. The total sliding-scale tariff quota for 2026 increased by 100,000 tons compared to 2025, and the issuance time was advanced by five months to alleviate the pressure on domestic cotton textile enterprises due to high-cost raw materials.

The latest data released by the General Administration of Customs shows that China imported about 1.8 million tons of cotton in March 2026, an increase of 138% year-on-year and 6% month-on-month. From January to March 2026, China's cumulative cotton imports reached 5.5 million tons, an increase of 62% year-on-year. The cotton import volume in March increased by more than twice year-on-year, further reflecting the urgent demand of downstream spinning enterprises for low-cost raw materials. Looking ahead, the current domestic cotton prices are still operating at a high level, and the demand for imported cotton is still strong.

According to the monitoring of Zhuochuang Information, the domestic and foreign cotton price spread (domestic cotton price - foreign cotton price) in the first ten days of March has reached a near one-year high of about 3000 RMB/ton. The low spot price of foreign cotton has been favored by downstream enterprises. In March 2026, the state officially issued a cotton import ad valorem tax processing trade quota of 300,000 tons, an increase of 100,000 tons compared to 2025, and the issuance time was advanced by five months, in order to alleviate the pressure on domestic cotton textile enterprises caused by the high cost of raw materials.

From the perspective of import source countries, the domestic and foreign cotton price gap is at a high level, and the low-priced imported cotton has a significant cost-performance advantage. Among them, Brazilian cotton has the highest cost-performance, and it is also the main variety imported into the domestic market in recent years. The General Administration of Customs data show that the quantity of Brazilian cotton imported in March accounted for 60% of the total import volume of the month, ranking first among all source countries. The next are Australian cotton and American cotton, with import market shares of 11% and 8%, respectively. Among them, the market share of Australian cotton and American cotton increased by 3 percentage points and 2 percentage points, respectively, compared to February. The main reason is that Australian cotton and American cotton are superior to Brazilian cotton in length and uniformity, and some spinning enterprises have increased the purchase of high-grade cotton to meet the needs of high-grade orders.

By the end of April, about 80% of the domestic cotton planting was completed, the planting area of cotton in Xinjiang has decreased this year, the expectation of reduced production has increased, and the new cotton textile capacity is continuously implemented, the demand for cotton is increasing, and the operators have a strong expectation of tightening supply and demand in the medium and long term. The domestic cotton price has been supported. According to the monitoring of Zhongchuang Information, on April 22, the spot average price of China's 3128B cotton increased to the highest level in two years, 16725 RMB/ton.

Cotton raw material prices continue to rise, but the downstream cotton yarn prices have a slow pace of price increase, which leads to a short-term profit compression for cotton textile enterprises, resulting in some cotton spinning enterprises facing prominent production cost pressure and a decrease in the willingness to accept orders. For cotton spinning enterprises holding import quotas, using high cost-performance imported cotton will undoubtedly significantly alleviate the pressure brought by raw material costs. Therefore, it is expected that the cotton import volume in April may remain above 1.5 million tons, and it may continue to increase year-on-year.

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