ICE December cotton settled at 77.76 cents per pound on the first trading day of October, slipping 0.97% and touching its lowest level since July 17. The significance of this price signal lies not in the magnitude of the decline itself, but in the convergence of currency, weather, and demand pressures that together are reshaping raw material cost expectations across the global textile supply chain.
The US dollar index climbed to a more than three-month high, serving as the most direct driver of the cotton price slide. Rising US Treasury yields have underpinned the dollar, with concerns over Middle East tensions adding to global price pressures. For overseas buyers, a stronger dollar makes US cotton more expensive in local currency terms, directly dampening purchasing appetite.
Simultaneously, excessive rainfall has hit southern Texas, where cotton bolls have already opened. Sustained precipitation at this stage directly damages fiber quality. Rain during harvest is the worst possible weather combination for cotton — it affects not only yield but also grade, and grade deterioration typically translates into wider spot discounts. With these two factors stacking up, futures have struggled to find effective support in the absence of demand-side positives.
The latest USDA export sales report offers a more granular view. For the week ending September 24, net upland cotton sales for the current marketing year reached 202,567 bales, down 12% from the prior week but up 101% from the four-week average. Next-crop-year sales added 39,160 bales. Shipments tell a more telling story: upland cotton exports totaled 149,507 bales, down 9% week-on-week and 11% below the four-week average. Shipments to China amounted to just 1,323 bales — a figure that is virtually negligible against the backdrop of China-US textile trade volumes.
For domestic spinning mills, this suggests a potential slowdown in foreign cotton arrivals in the near term, but it also indicates that Chinese buyers have limited willingness to restock at current price and currency combinations. The demand weakness is not China-specific; it reflects a global wait-and-see sentiment.
The Cotlook A Index stood at 89.15 cents per pound on October 1, down 30 points, resonating with the futures market. The synchronous decline in both spot and futures indicates that this is not merely a technical correction but a repricing of fundamental expectations.
From a supply chain transmission perspective, falling cotton prices offer short-term cost relief for spinning, but if end-user orders fail to follow through, the room for yarn mill margin improvement will be compressed. For downstream fabric and garment exporters, lower raw material costs should theoretically enhance quotation competitiveness, yet a stronger dollar simultaneously erodes the price advantage of dollar-denominated Chinese textiles in international markets. These two forces offset each other, and the net impact depends on the bargaining power and order structure of specific product categories.
For industrial belts such as Keqiao and Shengze, which are dominated by chemical fibers and blends, the direct impact of cotton price fluctuations is limited, but indirect effects should not be overlooked. Cotton competes with polyester and viscose staple fibers as substitutes, and sustained cotton weakness could suppress the comparative advantage of chemical fiber raw materials, influencing yarn blending decisions. For home textile and garment clusters in Nantong and Foshan, if foreign cotton prices remain weak, the fourth-quarter raw material procurement window could open earlier. However, it is important to note that the quality impact of Texas rains has not yet been fully reflected in the futures market. Should US cotton grades be downgraded, structural tightness in high-grade cotton supply could still push premiums for specific varieties higher.
Currency uncertainty is equally critical. If the dollar remains strong, it will not only suppress US cotton exports but also influence global textile trade flows through the invoicing currency channel.