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Australia’s Cotton Exports Rise As China And India Drive Demand

• By  Textile Excellence
• April 16, 2026

Australia’s cotton exports are set to rise sharply despite an expected dip in production, underscoring how global demand shifts and stock dynamics are rewriting trade flows in real time. For the 2025/26 marketing year (August 2025–July 2026), exports are forecast to climb nearly 10% to 5.7 million bales, powered by strong buying from China and India that more than offsets weaker shipments to Vietnam.

The surprising resilience is being driven not by a bigger crop, but by timing and inventory. A large 2024/25 harvest has left Australia with elevated beginning stocks, effectively front-loading supply into the current export cycle. These stocks are now acting as a buffer, allowing exports to stay strong even before the smaller 2025/26 crop enters the market.

Australia’s export rhythm also plays a decisive role. As a Southern Hemisphere producer, harvesting begins in April, with exports typically starting in May. Roughly 30% of the new crop is shipped in the final quarter of the marketing year, while the rest is carried into the next cycle. That means exports between May and July will increasingly reflect tighter supply conditions from the new crop.

On the demand side, the geography of trade is shifting fast. As of February, China accounts for about one-third of Australia’s cotton exports, while Vietnam and India each absorb roughly one-fifth. This balance has changed dramatically over the past few years. During 2021/22 and 2022/23, political tensions pushed China away from Australian cotton, redirecting flows toward Vietnam. That pattern has now reversed as China returns as a dominant buyer.

India has emerged as another key swing factor. Temporary duty removal between August and December 2025 triggered a surge in imports, with Australian shipments already surpassing last year’s totals. Together, China and India are now reshaping Australia’s export map.

However, this concentration carries risk. Around 70% of Australia’s exports are now tied to just three markets, leaving it more exposed to geopolitical and policy shocks than Brazil or the United States, where demand is more diversified.

Globally, cotton fundamentals remain mixed. Production is expected to rise to 121.9 million bales, driven by China, India, and Pakistan, while consumption edges up to 119.1 million bales. Trade volumes, however, are slightly lower at 43.7 million bales due to weaker flows from India and softer import demand in several Asian markets.

Ending stocks are also rising to 77 million bales, led by accumulation in China and India—signalling that even as demand strengthens, supply is staying ahead of it. In this shifting balance, Australia’s export surge stands out as a story of timing, trade realignment, and market concentration risk playing out simultaneously.

Globally, cotton fundamentals remain mixed. Production is expected to rise to 121.9 million bales, driven by China, India, and Pakistan, while consumption edges up to 119.1 million bales. Trade volumes, however, are slightly lower at 43.7 million bales due to weaker flows from India and softer import demand in several Asian markets.