China’s push to boost household consumption is emerging as the biggest driver of the global cotton market recovery, with the country’s mills expected to consume the largest volume of the fiber in more than 15 years, according to a report by Afreximbank Research.
Cotton mill use in China is forecast to reach 41.5 million bales in the 2026/27 season, the highest level since 2010/11, as Beijing shifts its economic strategy toward stimulating domestic spending through higher disposable incomes, consumer confidence measures and subsidies for textiles and apparel. The increase in demand is helping tighten global supplies and underpin a recovery in cotton prices after a prolonged downturn.
China accounts for more than one-third of global cotton mill consumption, making it the single largest influence on worldwide fiber demand despite the rapid expansion of textile industries in India, Bangladesh, Pakistan and Vietnam, the report said. Industry estimates put China’s spindle capacity at about 110 million, representing more than half of global capacity.
The rebound is being supported by a package of government measures designed to encourage consumer spending. Authorities have introduced subsidy programs covering home textiles in nearly half of China’s provinces while textile manufacturers replenish depleted yarn and fabric inventories after a prolonged period of weak demand.
China is also expanding its manufacturing base in Xinjiang, which is rapidly developing into one of the world’s largest integrated cotton and textile production hubs.
According to the report, spindle capacity in the region has increased by 59.5% since 2020, while the number of weaving looms has surged 327.6%. The expansion has lifted Xinjiang’s cotton-to-textile conversion rate to 45% in 2025, with spinning mills operating at utilization rates exceeding 90%, well above the national average of 70% to 75%.
The stronger outlook for Chinese demand comes as global cotton markets tighten. World cotton production is projected to decline to 116 million bales in the 2026/27 season while mill consumption is expected to reach about 122 million bales, pushing inventories to their lowest level since the 2018/19 season and supporting prices through the remainder of 2026.
