When cotton textile enterprises face both high raw material prices and weak terminal orders, their profit margins are squeezed from both sides. A closed-door meeting in Qingdao on August 13, 2026, attempted to provide a breakthrough. The annual meeting of the Raw Material Industry Chain Branch of the China Cotton Textile Association sent a clear signal: relying solely on traditional fine management is no longer sufficient. The industry must shift to a combination of financial tools, diversified fibers, and full-chain collaboration.
Event Background
The meeting, hosted by the China Cotton Textile Association and co-organized by Henan Tongzhou Cotton Industry, gathered key figures including Association President Dong Kuiyong, Branch Head Wei Gangmin, China National Textile and Apparel Council Industry Director Zhao Mingxia, and National Cotton Trading Market Vice President Jia Lei. The timing was significant—during the traditional off-season, rising raw material costs and weak terminal demand have led to a 'failure of price transmission mechanism' across the industry.
This 'failure' means upstream cotton price increases cannot effectively pass through to downstream yarn and fabric prices, severely eroding midstream profits. Vice President Jing Shenquan stated frankly that the industry faces triple pressures: weak terminal demand, restructuring of foreign trade patterns, and rising production costs. Against this backdrop, the branch is tasked with a heavier role—not just as an information hub, but as a channel for policy recommendations and a platform for enterprise relief.
Wei Gangmin's work report revealed that over the past year, the branch focused on three main lines: raw material security, market operation, and industry development. It made multiple recommendations to authorities, conducted field research in production areas, and built upstream-downstream communication platforms. Future work will focus on key policies such as cotton system reform, import quota reform, target price reform, and reserve cotton rotation, while strengthening research on non-cotton fibers like polyester staple, viscose staple, Lyocell, and bio-based fibers.
Industry Impact
Dong Kuiyong's five strategic directions in his concluding speech essentially prescribe a 'chain stabilization formula.' The first priority is repairing profit levels—he explicitly advised enterprises to value financial tools, using professional means like hedging to offset raw material price fluctuation risks. This implies that future finance departments in cotton textile enterprises may need to master futures and options operations like trading companies.
More noteworthy is the strategic adjustment of raw material structure. The meeting emphasized 'broadening raw material security perspectives,' elevating the supply chain security capability of non-cotton fibers to parity with cotton. This is not just a cost-hedging strategy but a re-layout of market tracks—when cotton prices are high, blended yarns and differentiated fiber products may become new profit growth points. For buyers, this means raw material selection is no longer limited to cotton; a diversified fiber comparison and substitution system is needed.
The meeting also revealed a pursuit of a 'symbiotic and co-prosperous ecosystem across the entire chain.' From raw material procurement, product R&D, to market expansion and brand building, all links need to shift from adversarial to collaborative relationships. The underlying logic is that optimization of a single link cannot solve systemic risks; only full-chain information sharing and rapid response can match the increasingly fragmented demands of the terminal market.