2,100 yuan per ton — that is the latest reading of the domestic-imported cotton price spread at the end of September, up sharply from 1,601 yuan a month earlier. A widening spread is not news in itself, but at a moment when the new crop is about to hit the market in volume, it signals that imported cotton's comparative advantage is being repriced and that the bargaining chips between ginners and spinners are shifting.
Three Pressures Behind the Price Slide
International cotton fell far harder than domestic prices in September. The ICE cotton futures main contract settled at 78.86 cents per pound, down 15.3% for the month. The international cotton M index, which tracks landed prices at Chinese main ports, fell 8.4%, equivalent to an import cost of about 15,215 yuan per ton. Over the same period, the Zhengzhou cotton futures main contract settled at 15,840 yuan per ton, down 7.2%, while the national cotton price B index stood at 17,315 yuan, down 4.9%. The sharper drop overseas was driven primarily by the Fed's renewed rate hike and expectations of further tightening this year, which weighed on commodities broadly.
Deeper changes are coming from the supply side. Harvesting is progressing steadily across the Northern Hemisphere, with U.S. cotton boll-opening and harvesting rates running 3 and 2 percentage points ahead of five-year averages. Brazil's harvest is complete, with production revised up to 4.144 million tons, up 1.5% year on year. Earlier concerns about a Xinjiang production cut have been broadly revised as harvest approaches — the national cotton market monitoring system now forecasts China's 2026 crop at 7.46 million tons, down just 290,000 tons year on year and still a historically high output. The repair of减产 expectations effectively removes the core support that had driven prices higher.
Demand shows a pattern of "warming but not booming." From January to August, national yarn output reached 14.339 million tons, up only 0.7% year on year, while Xinjiang yarn output hit 2.57 million tons, up 17.8%, confirming capacity continues to concentrate in the region. Domestic textile and apparel sales totaled 961.49 billion yuan and exports reached 203.31 billion dollars, up 5.1% and 3.1% respectively, showing resilience. Yet in early September, spinning mill operating rates stood at 81.9% and yarn sales ratios at 96.7%. Both rose for a second consecutive month but were 1.5 and 0.5 percentage points below year-earlier levels, and 4.9 and 3.4 points below first-half averages. A weaker-than-expected peak season means downstream capacity to absorb higher cotton prices is limited.
Policy Variables and Industry Transmission
Reserve cotton sales ended on September 30. A total of 409,000 tons were offered, with a 99.25% transaction rate and an average price of 17,191 yuan per ton. The suspension announcement, combined with positive signals from the U.S.-China leaders' meeting, helped slow the price decline late in the month. But the policy benefits are unevenly structured: tariff relief was extended to January next year, supporting autumn-winter exports; China's tariff reduction list includes U.S. cotton, theoretically lowering import costs, though quota limits and high bonded stocks mean actual incremental volume remains to be seen; the U.S. reduction list covers only some non-cotton home textiles, leaving cotton apparel outside the scope — a smaller-than-expected positive.
For ginners, current Xinjiang machine-picked cotton opening prices cluster at 7.0-7.3 yuan per kilogram, slightly above the ten-year average of 6.9 yuan, translating to lint processing costs of 16,000-17,000 yuan per ton — the upper end of the normal range. This cost line limits downside room but also explains why ginners are notably more cautious: some large enterprises are scaling back purchasing and processing, while most plan to hedge in futures while buying, avoiding outright long positions.
For spinners, new-crop arrivals will increase supply pressure, but cost support remains. Commercial inventories stood at 1.8097 million tons in mid-September, 634,000 tons higher than a year earlier, ensuring a smooth transition between crop years and ruling out any near-term scramble for cotton. The real uncertainty lies in international markets: the pace of Fed tightening and Middle East tensions could trigger periodic volatility, and international cotton prices are likely to remain range-bound.