China's wool textile industry is undergoing a structural rebalancing. Customs data for the first five months of 2026 shows total trade in wool raw materials and products reached $6.06 billion, up 8.16% year-on-year. But the headline figure masks a more telling divergence: imports surged 27.35% to $1.71 billion, while exports grew only 2.29% to $4.35 billion. This nearly 12-fold gap signals a strategic shift by domestic mills toward aggressive stockpiling of raw materials.
Import Surge: From 'Just-in-Time' to 'Just-in-Case'
The most striking figure is cashmere raw material imports, which soared 44.61% to $127 million. Wool and cashmere upstream inputs drove overall import growth, reflecting not mere restocking but a proactive bet on future orders. Domestic worsted and cashmere processing capacity is running at full throttle, and rising international wool prices have forced mills to lock in premium Australian and South African wools earlier than usual. The traditional quarterly procurement model is being replaced by 'buy first, produce later'—especially as high-end cashmere fabric and garment imports rise in both volume and value, confirming that upgrading demand at the consumer level is now feeding back to raw material sourcing.
For buyers, this means raw material prices are likely to stay elevated in H2. If autumn/winter orders materialize as expected, supply tightness could push costs even higher.
Export Divergence: Emerging Markets Take the Lead
Export value of $4.35 billion grew only modestly, but the structural shift is significant. Traditional European and American markets showed mixed results: Germany remained resilient, while Vietnam and Italy saw slight volume declines. The real growth came from emerging economies. Exports to India jumped 40.19% to $76 million, and to Turkey rose 24.89% to $41.46 million, both driven by wool tops. This reflects the expansion of textile processing in these countries—they import Chinese intermediate goods (wool tops), process them, and export finished products to the West. China is transitioning from a 'finished goods exporter' to an 'intermediate goods supplier.'
By category, wool top exports hit 13,300 tons worth $178 million, up 21.68%. Wool product exports grew 5.11%, cashmere products 6.97%. Yarn and knitted sweaters saw stable overseas demand, but growth lagged behind intermediates.
For factories and foreign trade firms, two strategies emerge: 1) consolidate the supply chain advantage in intermediates like wool tops, and 2) seize the window of expanding processing demand in emerging markets.
What It Means for Mills and Traders
The core tension is 'rising raw materials, slow finished goods.' With imports up 27% but exports only 2%, cost pressure is squeezing midstream margins. Companies that fail to pass on raw material costs to end buyers will see profitability erode.
A key risk: if autumn/winter orders disappoint, mills holding high-priced inventories could face de-stocking pressure—a lesson from some categories in 2025. However, the long-term outlook remains positive. China's integrated wool textile supply chain continues to strengthen, with stable trade surpluses in wool yarn and knitwear. The industry is shifting from scale expansion to high-end, differentiated competition.