Reserve Cotton Sales Hit Full Turnover for 15 Consecutive Days: Signals in a High-Level Price Correction

On August 3, reserve cotton sales once again closed with a 100% turnover rate, with the daily offer of 8,014.638 tons fully transacted at an average price of 16,862 yuan/ton. Behind this seemingly routine figure lies the fifteenth consecutive full-turnover day, bringing cumulative sales to 88,208 tons. Although prices dipped 96 yuan from the previous day, the 3128-grade equivalent price remained high at 17,553 yuan/ton, with premiums still above a thousand yuan, indicating that competition for high-quality cotton remains robust despite the price correction.

Background

The current reserve cotton release began on July 20, and by August 3, cumulative sales reached 88,208.582 tons, with a turnover rate consistently at 100%. Public data from China Cotton Information Network shows that imported cotton averaged 17,089 yuan/ton (3128-grade equivalent: 17,775 yuan/ton) with an average premium of 1,609 yuan/ton, while Xinjiang cotton averaged 16,583 yuan/ton (3128-grade equivalent: 17,280 yuan/ton) with a premium of 1,114 yuan/ton. The price gap between imported and Xinjiang cotton is around 500 yuan/ton, but the premium difference is larger, reflecting a stronger preference for imported quality among mills.

Industry Impact

High-level price correction combined with full turnover sends multiple signals. First, cotton demand from textile mills remains rigid, especially for high-grade cotton, as procurement willingness stays strong even with slight price declines. Second, sustained high premiums (1,114 yuan/ton for Xinjiang, 1,609 yuan/ton for imported) indicate market recognition of reserve cotton quality and a tight supply of comparable grades in the spot market. For downstream weaving and fabric producers, high cotton prices imply that cost pressures will not ease in the short term, keeping yarn quotes firm and transmitting upward pressure to grey fabrics and finished textiles.

From a regional industry perspective, Xinjiang cotton transactions directly influence pricing strategies of local ginners and traders. The 3128-grade equivalent price for Xinjiang cotton at 17,280 yuan/ton, down only 1 yuan from the previous day, shows relative resilience, linked to the supply gap before the new crop arrives. Imported cotton prices fell more notably (62 yuan), yet premiums remained high at 1,609 yuan/ton, suggesting that mills with import quotas are eager to lock in high-grade cotton to ensure stability for premium yarn products.

Practical Recommendations

For Procurement Teams - Monitor daily release volumes and premium fluctuations; if premiums narrow, consider increasing purchases to secure relatively lower-priced supplies. - With a 500-yuan/ton gap between imported and Xinjiang cotton, prioritize imported cotton for products requiring high fiber length and strength, but weigh quota costs and exchange rate risks. - Use real-time market data from the National Cotton Trading Market to track mill bidding ratios and gauge sentiment, avoiding chasing highs.

For Foreign Trade Enterprises - With cotton prices at high levels, incorporate price adjustment clauses in export quotes to mitigate raw material volatility. - Keep an eye on release schedules; if volumes increase, prices may soften, allowing for deferred procurement. - For long-lead orders, consider floating pricing mechanisms or forward hedging to manage risk.