The latest weekly US cotton export report has poured cold water on the cotton textile chain: net export sales of upland cotton for 2025/26 turned negative at -12.7 thousand tons in the week ending late July, marking a new annual low. This figure not only implies a large number of cancellations but also reveals the reality of weak global textile demand. For domestic enterprises, this is not just a bearish external signal; it also suggests a chain of pressure on imported cotton costs, spot cotton prices, and even cotton yarn quotes.
The Truth Behind the Data
Negative sales are uncommon in US cotton export reports. It means buyers not only refrained from new purchases but also canceled existing orders, with cancellations exceeding new sales. Combined with shipments of 50.5 thousand tons, down 5% week-on-week, it is clear that overseas mills have extremely low replenishment willingness and are still in a destocking cycle.
On a deeper level, US cotton as a global pricing anchor often leads international price declines when sales turn negative. This implies that international quotes may weaken further in the coming weeks, pulling down domestic import costs. For coastal spinning mills relying on imported cotton, raw material cost expectations are revised downward, but they must also guard against inventory devaluation risks amid price volatility.
Price Transmission Logic in the Chain
From cotton to yarn, the price transmission chain is clear and direct. Weakening cotton prices will erode the cost support for yarn, and with already sluggish demand, spot yarn prices are likely to follow downward. In the futures market, Zhengzhou Cotton and Cotton Yarn contracts may remain weak in the short term, dampening bullish sentiment.
However, falling costs have different implications for different segments. For spinners, lower raw material costs can ease some profit pressure, but if downstream orders are insufficient, price cuts may compress finished product selling prices. For weaving and apparel companies, lower yarn prices help control procurement costs, but they need to be wary of supply fluctuations caused by upstream production cuts.
Regional Industry Belts and Foreign Trade Impact
The Xinjiang cotton region, as a major domestic production area, will see spot quotes affected by international cotton prices, but more depends on the domestic supply-demand balance. In Shandong, Henan, and Jiangsu, where cotton spinning is concentrated, enterprises will adopt more cautious procurement strategies, and wait-and-see sentiment may rise.
On the foreign trade front, the decline in US cotton sales reflects weakening consumer demand in Europe and the US. For cotton-made garments and home textile exporters, overseas orders may continue to face pressure. Companies need to reassess profit margins on existing orders and monitor the impact of RMB exchange rate fluctuations on export competitiveness.