For the week of September 7-11, 2026, the floor price for central reserve cotton sales was set at 17,303 yuan per ton (based on grade 3128B). This figure marks another decline from the previous week, signaling that the supply-demand balance in China's cotton market is tilting further in favor of buyers. For downstream textile mills, this easing of raw material costs may signal the start of a restocking window.
The logic behind the price signal
The reserve cotton floor price is not an isolated number; it is a key tool for state regulation of the cotton market and directly reflects the policy stance on current cotton prices. At 17,303 yuan per ton, the price is significantly lower than the same period last year, indicating that the fundamentals of ample domestic supply and sluggish demand remain unchanged. From the industry perspective, the seasonal pre-harvest price spike has been offset by supply-side pressure this year.
More importantly, the consecutive downward adjustments in the floor price reveal a policy intent to stabilize market expectations and reduce cotton costs for textile enterprises. For buyers, this means limited room for significant price rebounds in the short term, allowing for a more measured procurement pace.
Industry transmission: from cotton prices to orders
The impact of low cotton prices on the textile chain is mixed. Upstream ginners and traders face inventory depreciation pressure, increasing their willingness to sell and opening room for negotiation. Midstream spinning mills, especially those with low inventory and just-in-time purchasing strategies, stand to benefit from improved gross margins.
However, cotton prices are not the only determinant of orders. Terminal consumption is recovering only moderately, demand from Europe and the U.S. remains uncertain, and competition from Southeast Asian textile countries is intensifying. Thus, while lower raw material costs ease pressure on mills, they cannot alone reverse weak demand. Blind stockpiling risks tying up capital and increasing storage costs.
From a regional perspective, spinning clusters in Xinjiang, Shandong, and Henan are more sensitive to reserve cotton releases. Their procurement habits are closely linked to the auction rhythm, and lower floor prices tend to stimulate participation. In contrast, mills in Jiangsu and Zhejiang, which focus on mid-to-high-end fabrics, have higher quality requirements and must pay close attention to the match between actual transaction prices and quality premiums.