77.76 cents per pound. That was the settlement for ICE December cotton on October 1, down 0.97% on the day and touching its weakest intraday level since July 17. The Cotlook A Index stood at 89.15 cents/lb, off 30 points. Prices moved lower, but the driver was not cotton itself — the dollar index climbed to a more than three-month high, and that was the most direct force behind the slide.
Three Pressures Stacking Up
The transmission chain from a stronger dollar is straightforward: US cotton priced in dollars becomes more expensive for overseas buyers, and inquiry appetite contracts accordingly. Market participants point the same way — the currency is rising, and demand carries its own concerns, with the two amplifying the decline. This is not merely a liquidity move; it pushes US cotton's export competitiveness down a notch.
Weather is the second pressure line. In southern Texas, bolls have already opened, and excessive rain at this stage directly damages fiber quality. Rain during boll-opening is close to an irreversible loss for cotton; quality deterioration usually compresses spot premiums, and futures tend to price that expectation in advance.
Export data forms the third line. USDA's export sales report showed that for the week ending September 24, current-crop upland cotton net sales reached 202,567 running bales, down 12% week on week but 101% above the four-week average. Shipments totaled 149,507 bales, down 9% week on week and 11% below the four-week average. Shipments to China were just 1,323 bales.
Structural Signals in the Data
Placed together, these three figures create a strong sense of contradiction. Net sales fell week on week yet remained far above the four-week average, suggesting weekly volatility is high rather than demand collapsing. Shipments declined on both a weekly and four-week basis, indicating that physical logistics are slowing. For spinning mills, sales represent expectations while shipments represent goods in hand — weaker shipments mean short-term spot supply pressure will not surface immediately.
More noteworthy is the volume shipped to China. At 1,323 bales, this is almost negligible against China's monthly cotton import scale. Two explanations are possible: Chinese buyers are deliberately holding back orders in a downward price channel, waiting for a lower pricing window; or the domestic-international price spread has not widened enough to stimulate large-scale purchasing. Either way, the conclusion is the same — China's restocking pace has shifted later.
For upstream players, this means US cotton selling pressure could concentrate in the latter half of the fourth quarter. For midstream spinners, it means bargaining power in raw material procurement currently sits with buyers.
Impact on Industrial Clusters and Procurement Rhythm
Clusters such as Keqiao, Shengze and Nantong, focused on fabrics and home textiles, do not share the same sensitivity to cotton price swings. Mills making knit and woven apparel fabrics carry a high cotton share in raw material costs; falling prices short-term support gross margins, but if end-user orders do not follow, low costs can turn into inventory pressure. Home textile firms have longer order cycles and tend to lock in at lower prices in batches.
Note that a stronger dollar does not only affect cotton. For export-oriented textile firms, relative movements in the RMB-USD rate simultaneously affect imported raw material costs and finished goods export quotes. After hedging both ends, the actual profit margin may not look as attractive as the cotton price decline suggests.
In the short term, ICE cotton is likely to oscillate in the 77–80 cent range, with the breakout direction depending on how Texas weather evolves and whether the dollar index tops out. If rain continues to affect fiber quality, premiums for high-grade cotton could widen, making the spread between low-grade and high-grade cotton a key variable in procurement decisions.