16,291 yuan per ton. That is the floor price for standard grade (3128B) reserve cotton sales in the first week (July 20-24) of 2026. For the cotton textile industry, this figure is not just a price anchor—it directly determines the raw material procurement cost and profit margin for spinning mills over the next month.
Logic Behind the Floor Price
The reserve cotton sales floor price is not set arbitrarily. According to national regulatory requirements and the sales announcement, the floor price is calculated based on the monthly "Domestic Cotton Quality Differential Table" published by the China Cotton Association, combined with cotton inspection results for quality adjustments. This means that daily batch prices will fluctuate above or below the floor price depending on grade, length, micronaire, and other indicators.
A key detail: the floor price corresponds to standard grade 3128B (28mm length, grade 3 white cotton). In actual procurement, higher-grade cotton often trades at a premium above the floor price, while lower grades may trade at a discount. Spinning mills must carefully calculate the grade requirements for their product mix before bidding to avoid overpaying.
Transmission Effects on the Cotton Textile Chain
For upstream ginners and cotton farmers, the 16,291 yuan/ton floor price is a significant market signal. If reserve cotton prices fall below spot market levels, they will effectively curb excessive spot price increases and protect downstream mills' cotton costs. Conversely, if the floor price exceeds market expectations, it may push up the entire cotton price center, squeezing mills' processing margins.
Downstream, the cost pressure on cotton yarn, grey fabric, and finished fabric manufacturers will be directly affected. The current international-domestic cotton price spread still exists, with imported cotton offering clear price advantages, but quota restrictions force many companies to rely on domestic resources. The pace and price level of reserve cotton releases will largely determine the export competitiveness of cotton textiles in the third quarter.
Bidding Strategy During the Procurement Window
For spinning mills, late July marks the transition from the traditional low season to peak season. The launch of reserve cotton sales coincides with this period. Companies must decide whether to participate in auctions based on order backlogs and inventory cycles.
- If orders are full and raw material inventories are low, mills should prioritize locking in reserve cotton near the floor price to hedge against later spot price increases.
- For mills producing low-count yarns, they can focus on lower-grade batches with larger discounts to reduce raw material costs.
- For mills producing high-count, high-density products, they must closely monitor premium levels for high-grade cotton and may need to supplement with imported cotton or Xinjiang spot cotton.