As a leading importer of cotton, China plays a pivotal role in shaping the international cotton market (Figure 1). China’s cotton imports are highly regulated by government policy, with centralized guidance through a tariff-rate quota (TRQ) system. The TRQ allows a specified amount of cotton (quota, currently at 894,000 tons) to be imported at a lower tariff rate (1%). Imports exceeding the quota are subject to a significantly higher tariff rate (currently at 40%). China adjusts these quotas annually in accordance with World Trade Organization (WTO) rules. Through this mechanism, the government can set cotton import policies in coordination with its reserve programs.
In 2017, just prior to the first round of the U.S.–China trade war, China produced 27 million bales of cotton. This made China the second-largest cotton producer after India, which produced 29 million bales. Despite this high level of domestic production, China still ranked as the world’s third-largest importer in 2017, after Bangladesh and Vietnam. Since 2017, China’s share of global cotton imports has ranged from 12% to 34%, largely due to its cotton reserve programs and the import quota system.
In 2023, the above-noted China policies prompted a high volume of cotton imports, which significantly influenced global cotton markets. This import surge was driven by favorable (low) cotton prices and anticipation of trade uncertainties in the 2024 marketing year following the U.S. election. As a result of the large imports in 2023, China’s need for cotton imports in 2024 declined substantially, while domestic cotton production was boosted to a high level. A similar period of disruption occurred in 2012–2014, when China responded to the 2011 price spike by building up massive reserve stocks. For the next three years, those reserves were drawn down in place of imports, sharply reducing China’s buying from the world market. This shift put heavy pressure on global demand, and U.S. cotton prices eventually slid from the 80–90 cent range per pound back down to more typical long-run levels. In the 2025 crop year, China is projected to produce 31.5 million bales of cotton, the highest among all producing countries. Nevertheless, it also imported 5.3 million bales, ranking just behind Bangladesh (8.1 million), Vietnam (8.0 million), and Pakistan (5.9 million).
China’s role in the global cotton market has important implications for U.S. growers. Even as the world’s largest cotton producer, China continues to import significant volumes of cotton, and these purchases can swing sharply from year to year depending on government policies, reserve levels, and trade dynamics. These swings in demand can create added risk and unexpected price volatility, even during the fall season, when U.S. growers typically anticipate harvest-time pressures. For U.S. growers, keeping an eye on China’s policy changes and trade relations is critical, as these factors directly affect global cotton prices and export opportunities. Ultimately, China’s decisions will remain a key driver of market conditions that shape the fortunes of cotton producers worldwide.
Figure 1. Top Five Global Cotton Importers by Country and Year
Article courtesy of: Liu, Yanguan, Gopinath Munisamy, and John Robinson. “China’s Pivotal Role in the Global Cotton Market.” Southern Ag Today 5(39.3). September 24, 2025. Permalink
