US upland cotton export sales surged 224% week-on-week to 230,517 bales, a striking figure against the backdrop of slowing global cotton trade growth. More intriguingly, the same report showed net sales to China at negative 4,702 bales and shipments to China at zero. While overall demand rebounds strongly, Chinese buyers are almost entirely absent. This is not a statistical blip but a signal that global cotton trade flows are undergoing a structural shift.
Breaking Down the Export Data: Who Is Buying, Who Is Retreating
The latest USDA weekly report shows that for the week ending September 17, current-crop US upland cotton net sales reached 230,517 bales, up 224% from the previous week and 244% above the four-week average. Next-crop upland cotton net sales added 122,994 bales. Shipments for the week totaled 164,704 bales, up 16% week-on-week but down 5% from the four-week average.
The key detail is China's absence. Net sales to China fell by 4,702 bales, next-crop net sales to China were zero, and shipments to China were zero. This means the strong export growth was almost entirely driven by markets outside China—Vietnam, Pakistan, Turkey and other traditional buyers may be restocking. For Chinese textile enterprises, this sends a clear signal: global cotton trade is repricing around China, and the bargaining window for Chinese buyers may be narrowing.
ICE's most-active December cotton contract rose 0.42 cents, or 0.51%, to settle at 83.31 cents per pound. StoneX risk management consultant Bailey McHenry noted the export sales report was very strong, showing solid sales during last week's market decline, and that improving demand is a positive development. Market participants are closely watching for any positive news on demand recovery.
Industry Transmission: The Cost and Opportunity of China's Absence
Several factors may explain China's absence from US cotton purchases. First, domestic cotton inventories are relatively ample, and reserve cotton rotation policies reduce the urgency of restocking. Second, after the spread between domestic and international cotton prices narrowed, imported cotton's price advantage weakened. Third, some enterprises are turning to Brazilian and Australian cotton as alternative sources for supply chain security. Regardless of the reason, the result is that China's marginal influence on global cotton pricing is diminishing.
From the perspective of industrial clusters, raw material procurement strategies in Jiangsu and Zhejiang coastal textile hubs are diverging. Some export-oriented enterprises are accepting higher-priced imported cotton to lock in order profits, while domestic-focused mills rely more on Xinjiang cotton and state reserves, with lower sensitivity to international price swings. This divergence means that if US cotton prices continue to strengthen, cost pressure will appear faster for export-oriented firms than for domestic-focused ones.
Weather factors add uncertainty. Excessive rainfall remains a major concern, and as harvest approaches, too much rain could delay harvesting and negatively affect cotton quality. If US cotton quality declines, high-grade cotton supply will tighten, further pushing up premiums for quality cotton and adding pressure on Chinese enterprises sourcing raw materials for fine-count yarns.
The Cotlook A Index stood at 93.25 cents per pound on September 24, unchanged. International cotton prices have temporarily stabilized, but strong export data coexisting with a firm dollar suggests current price support comes more from demand expectations than currency factors. The dollar index hit a two-month high, which theoretically pressures dollar-denominated cotton, but strong export sales temporarily overshadowed the currency headwind.
Procurement Strategy: Window Period and Risk Hedging
For Chinese textile enterprises, the current situation requires distinguishing short-term operations from medium- to long-term positioning. In the short term, strong US cotton exports may lift international cotton price centers, and the procurement window is narrowing. In the medium to long term, China's absence from the US cotton market may instead push domestic enterprises to accelerate investment in Xinjiang cotton quality improvement and supply chain self-reliance.
ICE deliverable No. 2 cotton inventory stood at 29,519 bales as of September 23, unchanged. Low inventory means the market has greater elasticity to spot demand. Once Chinese buyers return, the price reaction could be sharp. Therefore, enterprises with export orders in hand should not overly bet on falling cotton prices; using futures tools to lock in raw material costs is a rational choice.
For Buyers - Monitor US cotton shipment data and changes in shipments to China; if China shipments turn positive from zero, it may signal the procurement window reopening - During the period of narrowing domestic-international price spreads, prioritize locking in high-grade cotton supply to avoid later premium expansion due to US quality concerns - Use ICE cotton pullbacks to build positions in batches, avoiding chasing highs all at once
For Exporters - Closely track the linkage between the dollar index and US cotton export data; currency fluctuations may partially offset the impact of cotton price rises on quotes - For orders with high US cotton dependence, communicate raw material cost pass-through mechanisms with customers in advance to avoid one-sided profit squeeze - Watch procurement moves by competitors in Vietnam and Pakistan; their restocking pace may affect order prices for Chinese enterprises in international markets
The overall judgment is that the coexistence of surging US cotton exports and China's absence is the most noteworthy mismatch in today's global cotton market. In the short term, this mismatch may push international cotton prices higher; in the medium term, it may accelerate adjustments in China's textile raw material procurement structure. For mills and traders, rather than waiting for signals of Chinese buyers returning, it is better to actively manage raw material cost exposure and lock in certain profits amid uncertainty.