The domestic cotton market is undergoing a rare pricing restructuring. On July 1, 2026, quotations for Grade 3128B cotton across major producing and consuming regions in China showed that regional price spreads have compressed to historic lows. Taking the Xinjiang market price of 17,626 yuan/ton as the benchmark, the highest inland quotation from Anhui was 17,871 yuan/ton, a difference of only 245 yuan/ton. In previous years, this spread often fluctuated between 500-800 yuan/ton.
What does this narrowing spread mean? For textile mills, the traditional economic logic of "buy Xinjiang, ship inland" is being recalculated. The procurement strategy that once regarded Xinjiang cotton as a low-cost raw material base now faces a rebalancing of transportation costs, time costs, and price advantages.
Industrial Logic Behind the Narrowing Spread
From the quotation data, prices in major textile hubs such as Shandong, Jiangsu, and Zhejiang are highly convergent, at 17,735 yuan/ton, 17,781 yuan/ton, and 17,781 yuan/ton respectively, with spreads to Xinjiang not exceeding 200 yuan/ton. In contrast, quotations from non-traditional core cotton spinning areas like Anhui and Fujian are slightly higher, at 17,871 yuan/ton and 17,783 yuan/ton, reflecting subtle changes in regional supply and demand.
The narrowing spread is the result of multiple factors. On one hand, adjustments to the transportation subsidy policy for Xinjiang cotton have increased the comprehensive cost for inland enterprises to purchase Xinjiang cotton. On the other hand, cotton planting areas in inland regions have declined for three consecutive years, leading to tight local supply and pushing up spot prices. At the same time, the slower pace of state reserve cotton auctions has reduced market circulation, causing prices to converge across regions.
Transmission Effects on the Textile Industry Chain
This change directly impacts the cost control models of cotton spinning enterprises. For a medium-sized spinning mill in Shandong with an annual cotton consumption of about 20,000 tons, purchasing all cotton from Xinjiang under the old spread would save approximately 10 million yuan in raw material costs. With the spread narrowing, this advantage has nearly vanished. Companies must reassess whether to continue relying on Xinjiang cotton or shift to imported cotton or increase the proportion of inland cotton.
For upstream ginning mills, the narrowing spread compresses the arbitrage space for Xinjiang cotton. The traditional profit model of "buying low in Xinjiang, selling high inland" is becoming unsustainable. Some mills have begun adjusting sales strategies, directly connecting with end-use textile companies to reduce intermediary steps.