On July 9, 2026, imported cotton prices at China's main ports posted a slight decline. The SM index of the International Cotton Price Index fell to 90.92 cents/lb, while the M index dropped to 88.99 cents/lb, down 0.61 and 0.60 cents respectively from the previous trading day. Converted to the 1% tariff port delivery price, SM grade was approximately 15,226 yuan/ton and M grade about 14,907 yuan/ton. Although the single-day decline was less than 1%, this subtle shift warrants attention along the textile chain, especially against the backdrop of rising global production forecasts and moderating demand growth in major consuming countries.
Industrial Context Behind the Price Movement
The current adjustment in imported cotton prices is not an isolated event. On the supply side, planting areas in major producing countries—the U.S., India, and Brazil—have all expanded for the 2025/2026 season. The USDA's June supply-demand report projected global cotton output to increase by approximately 3.5% year-on-year. This supply glut expectation continues to weigh on market sentiment.
Demand presents a mixed picture: orders from Southeast Asian textile and apparel sectors are recovering, but Chinese textile mills—the world's largest cotton importers—have turned cautious in raw material procurement. Domestic gray fabric and fabric inventories are high, with weaving mill operating rates hovering around 70%. The latest price dip reflects stronger buyer bargaining power rather than outright oversupply.
Transmission Effects on China's Textile Chain
Lower imported cotton prices directly benefit spinning mills using foreign cotton. At current exchange rates, per-ton import costs fall by about 100-120 yuan. For large mills consuming thousands of tons monthly, this can translate into savings of hundreds of thousands of yuan. However, whether such cost advantages pass through to end products depends on downstream order price negotiations.
For domestic cotton-producing regions, lower import prices create comparative pressure. If the price gap between Xinjiang cotton and imported cotton continues to narrow, local ginners may need to adjust sales strategies. Still, China's import quota system and sliding tariff mechanism provide a buffer against short-term shocks.
Industry Outlook and Trading Logic
Historically, July sees heightened volatility in international cotton prices—a period combining the Northern Hemisphere's new-crop growing season with a consumption lull. This week's slight decline is more likely a technical adjustment than a trend reversal. Key supporting factors remain: global ending stocks-to-use ratios are at five-year lows, and extreme weather threats to major producing regions are not fully resolved.
For buyers, current prices sit in the middle of the three-month range—neither a bargain opportunity nor a panic point. Maintain a demand-based procurement pace and watch the August USDA report for production revisions. For exporters, lower import costs help improve competitiveness of cotton yarn and fabric export quotes, but be wary of renminbi exchange rate fluctuations eroding margins.