The reserve cotton sales floor price has recorded its first weekly decline of the year. According to the announcement by China National Cotton Reserves Corporation, the floor price for the 7th week (August 31 to September 4) is set at 17,228 yuan per ton, based on the standard grade 3128B. This represents a drop from the previous week's price, and although the magnitude is modest, the signal is clear: the policy side is using price tools to adjust the cotton costs for textile mills.
Event Background
The 2026 central reserve cotton sales campaign started on July 20 and has now entered its seventh week. According to the sales announcement, the actual floor price for each daily batch is calculated based on the standard grade floor price, adjusted according to cotton inspection results and the quality differential table published by the China Cotton Association. In August, the association released the latest Domestic Cotton Quality Differential Table, providing a basis for price differences among various cotton grades. This means that 17,228 yuan per ton is not a uniform price but a benchmark for quality adjustments.
The weekly decline comes just before the traditional peak season for textile orders. September is usually the period when autumn and winter fabric orders are placed intensively, and weaving mills need to lock in raw materials in advance. The lower floor price directly reduces the procurement cost for spinning mills, especially beneficial for small and medium-sized enterprises that mainly produce pure cotton yarn. From the industry chain perspective, cotton cost accounts for more than 70% of the production cost of cotton yarn, and every 100 yuan per ton fluctuation in the floor price has a direct impact on yarn quotations.
Industry Impact
For textile enterprises, the decline in the reserve cotton floor price means marginal improvement in raw material procurement costs. Calculated at the floor price of 17,228 yuan per ton, plus processing fees and financial costs, the actual delivered cost is still lower than the price of imported cotton during the same period, making domestic reserve cotton more attractive in terms of cost-effectiveness. For export-oriented enterprises, the reduction in raw material costs directly translates into pricing competitiveness, helping to secure more room in overseas order negotiations.
However, the price decline should be viewed rationally. On one hand, the volume of reserve cotton released is limited, and not all enterprises can win the batches they need. On the other hand, the existence of the quality differential table means that actual transaction prices for high-grade cotton may still be higher than the floor price. Therefore, enterprises should not over-rely on policy dividends but should formulate flexible procurement strategies based on their own product mix and order demand.
From the perspective of market expectations, the weekly floor price decline may trigger a chain reaction in the spot cotton market. Some traders may adjust their quotations, driving a slight decrease in Xinjiang cotton and local cotton prices. For weaving enterprises, this means short-term relief in raw material cost pressure, but in the long run, they still need to pay attention to international cotton price trends and the recovery of downstream demand.