Domestic cotton prices have fallen close to the lower bound of new-crop cost ranges, a level that will shape short-term direction more than any macro headline. The Zhengzhou cotton futures main contract averaged 15,838 yuan per tonne for the week, down 1.1% from the prior week, while the China Cotton Price Index B averaged 17,378 yuan per tonne, a drop of 1.3%. Prices briefly hit a more than five-month low before stabilizing as seed cotton purchase prices found a floor, signalling that cost support is shifting from expectation to reality.
Price Review: Domestic and International Markets Weaken in Tandem
International markets faced similar pressure. The New York cotton futures main contract averaged 83.12 cents per pound, edging down 0.3%, while the International Cotton Index (M), converted to RMB import cost, stood at 15,171 yuan per tonne, down 1.8%. Domestic prices exceeded international prices by 2,207 yuan per tonne, with the spread widening by 49 yuan week on week. A wider spread means imported yarn gains a marginal cost advantage, quietly pressuring domestic spinners' pricing power.
Yarn prices also slipped. Domestic C32S carded yarn averaged 23,650 yuan per tonne, down 0.2%, while the same specification from major import sources averaged 23,520 yuan per tonne, down 0.4%, leaving conventional imported yarn 130 yuan below domestic yarn. Polyester staple fibre fell 213 yuan to 8,671 yuan per tonne, and the downward shift in chemical fibre substitutes further squeezed the bargaining room for pure cotton yarn.
Industry Impact: Policy Tailwinds Versus Real Pressures
The China-US high-level interactions from September 23 to 25 produced an eight-point consensus, including a US$30 billion reciprocal tariff reduction arrangement, progress on a trade council mechanism, and an extension of Kuala Lumpur trade consultation outcomes. For cotton textile exporters, this implies lower expected tariff costs, but until details are finalised, buyers are unlikely to commit to long orders. The improvement in the export environment is more likely to show up as more inquiries rather than a surge in orders.
On September 22, the Ministry of Industry and Information Technology and other departments issued the 15th Five-Year Plan for the Light and Textile Industries, targeting combined revenue of over 30 trillion yuan for above-scale enterprises by 2030, with tasks covering innovation capacity, supply-demand alignment, and intelligent green transformation. For the cotton textile chain, this signals a medium-term shift toward higher-value yarns and functional fabrics, potentially accelerating the exit of low-end capacity.
Supply-side factors are mixed. US cotton good-to-excellent ratings fell 2 percentage points week on week to 34%, 13 percentage points below last year, with Texas at just 18%, keeping production concerns alive. However, the US harvest reached 13%, 2 percentage points ahead of the five-year average, and Brazil exported 106,000 tonnes of cotton in August, up 37.3% year on year, easing global available supply. In China, Xinjiang's boll-opening progress exceeded 80%, machine-picked seed cotton quotes stabilised at 7.0-7.3 yuan per kilogram, and ginners' purchasing attitudes diverged, with some facing financing constraints and short-cycle operations expected to rise.
Demand remains the biggest drag. US cumulative sales and shipments for the season trail the five-year average, while domestic cotton yarn sales are stable overall but with volume declines in some regions. Spinners hold firm on prices, yet downstream uptake is weak and stockpiling appetite is low. Reserve cotton auctions saw a 99.90% transaction rate, up 6.83 percentage points week on week, but the average price fell 208.46 yuan to 16,607.55 yuan per tonne. Sales of 2026 central reserve cotton will stop from September 30, which could bring a phase of sentiment recovery.