16,763 yuan per ton—that is the benchmark price for grade 3128B cotton in the fifth week of 2026 central reserve sales (August 17-21). The number itself is not shocking, but within the annual sales cycle that began on July 20, it signals a gentle bottom-seeking process in domestic cotton prices. For textile mills, this is not a reason to panic but a starting point to recalculate costs.
Background
China National Cotton Reserves Corporation began 2026 reserve cotton sales on July 20, announcing a weekly benchmark price. The fifth week's price is slightly lower than previous weeks, set at 16,763 yuan per ton for standard grade 3128B. This price is not fixed; daily batch prices are calculated based on cotton inspection results and the quality differential table issued by the China Cotton Association. Consequently, within the same week, actual transaction prices may diverge due to quality indicators such as length, strength, and micronaire.
The downward adjustment is not an isolated event. Industry data show that domestic commercial cotton inventories remain relatively high, downstream textile enterprises are cautious in purchasing, and spot market transactions are sluggish. As a market regulator, the reserve sales price adjustment reflects the policy response to the current supply-demand balance—guiding prices to meet mill demand while avoiding unsold auctions.
Industry Impact
For textile enterprises, the most direct impact is a marginal reduction in procurement costs. At 16,763 yuan per ton, if the quality premium or discount is not high, the actual delivered cost may be lower than spot market quotes for similar grades. This offers a window for mills with low inventories and stable orders to restock strategically. Especially for small and medium-sized spinning mills with limited cash flow, seizing such policy-driven price troughs is crucial.
However, lower costs do not mean blind buying. Quality variability must be addressed. According to the quality differential table, premiums or discounts can reach hundreds of yuan per ton. If enterprises only focus on the benchmark price and ignore quality indicators, the final cost per ton of yarn may not be advantageous. Additionally, international cotton prices remain a key variable. If foreign cotton prices continue to fall, the price gap between imported and reserve cotton may narrow, diverting some demand away from reserves.
From a supply chain perspective, the impact on cotton yarn prices lags. The current yarn market is weak, with downstream fabric mills pressuring prices. Even if mills procure low-cost cotton, they cannot immediately raise yarn quotes. This means the benefit of reserve cotton is more on the cost side than the profit side. Mills must recognize that without demand recovery, low-cost raw materials only provide more room to maneuver, not guaranteed profits.