The long-staple cotton market is gripped by an unusual standoff: while downstream high-count yarn prices continue to slide, Xinjiang long-staple cotton spot prices remain firm—mills have even narrowed discounts for regular customers. This divergence reflects deep disagreements on inventory strategies across the supply chain.
The Temperature Gap Between Supply and Demand
On the supply side, confidence among Xinjiang long-staple cotton ginners and traders appears unshaken by the off-season. As of early July, the fixed price for the 2024/25 crop in Bazhou, southern Xinjiang, stood at 26,720–26,920 yuan/ton, while the 2025/26 crop with better specs in Aksu was quoted at 28,220 yuan/ton—virtually unchanged from late June. Some merchants explicitly reject small-lot purchases of one or two batches, insisting on bulk deals with large-scale spinners.
This contrasts sharply with demand. Spinners in Shandong, Jiangsu, and Henan report persistently weak sales of 60S and above high-count yarns, typical of the industry's off-season. Consequently, they maintain a 'light inventory' approach, buying only for immediate needs. Even though traders allow half-batch withdrawals, overall trading remains tepid, described by insiders as 'lukewarm water.'
US Acreage Growth vs. Domestic Pricing Logic
Notably, the USDA's latest report projects 2026/27 US Pima cotton planted area at 150,000 acres, up 6% year-on-year—a reversal from the March intentions report of 130,000 acres (-8.1%). This increase theoretically pressures global long-staple prices, yet domestic merchants seem to disregard this long-term bearish factor.
Two reasons explain this: first, domestic long-staple inventory is tightening. Inland warehouse stocks are low, concentrated in Zibo, Weifang, and Jiangyin, limiting available supply. Second, mills value the scarcity of high-quality resources. For instance, Aksu's 2025/26 crop with 40-42 CN/TEX breaking strength commands strong pricing power. Merchants prefer to wait for 'big buyers' rather than sell in dribs and drabs, effectively betting on future premiums for quality cotton.
Deep Impact of Upstream-Downstream Bargaining
What does this stalemate mean for different players? For spinners, a 'light inventory' strategy reduces capital lock-up and price risk, but leaves them vulnerable to sudden cost spikes if prices move. Those producing high-count yarns, which rely on long-staple cotton as a critical input, risk order delays and quality instability if stocks run too low.
For merchants and ginners, holding firm on prices is not risk-free. If downstream demand stays weak and high-count yarn inventories continue to build, spinners' buying appetite may wane further. In that case, cotton stocks could shift from 'bargaining chips' to 'liabilities.' One major trader now holds only 11 batches of machine-picked long-staple cotton from 2025/26—whether this 'no rush to sell' stance persists depends on order recovery.