Cold Thoughts on Xinjiang Cotton Market Behind Rising Cottonseed Pre-sales

When cottonseed prices broke through 2.45 yuan/kg, Xinjiang ginners collectively turned to pre-selling cottonseed, sending a signal far more complex than it appears. While Zhengzhou cotton futures fluctuate in the 16,600-16,900 yuan/ton range, spot cotton trading remains sluggish, and industrial capital is seeking a reliable anchor amid uncertainty.

Event Background

Ginners in major producing areas such as Aksu, Kashgar, and Changji have recently launched cottonseed pre-sales, with delivery concentrated from mid-October to the end of December. Cottonseed prices have risen to 2.45-2.50 yuan/kg, and ginners generally consider this level relatively high, so they choose to lock in profits in advance. Behind this move is the expectation of high opening prices for 2026/27 seed cotton, coupled with uncertainty about cotton quality, making ginners reluctant to take risks in pre-selling lint cotton.

Meanwhile, reserve cotton sales continue, keeping market supply pressure unabated. Zheng cotton main contract CF2701 fluctuates between 16,600 and 16,900 yuan/ton, and traders and textile mills remain cautious. Warrants from delivery warehouses in Kashgar, Hami, and Gansu receive even less attention, reflecting the market's lack of confidence in quality and basis of non-mainstream producing areas.

Industrial Impact

In northern Xinjiang, listed resources of 2025/26 cotton remain scarce, and the basis of high-quality cotton from Corps farms such as the Sixth and Eighth Divisions remains significantly high, with only a few large-scale branded mills showing willingness to take delivery. This structural divergence implies that the price gap between high-quality and ordinary cotton may widen further, raising costs for mills spinning high-count yarns to lock in quality supplies.

Although traders in southern Xinjiang (Kashgar, Kezhou, Hotan, Aksu) quote actively with certain basis advantages, textile mills and intermediaries show low acceptance. The reason lies in weak end demand; mills keep raw material inventories low and adopt a hand-to-mouth procurement strategy. The active cottonseed pre-sales contrast sharply with sluggish lint trading, as capital shifts from high-risk lint to downstream by-products.

For ginners, cottonseed pre-sales are a risk management tool, but they also give up potential gains if cottonseed prices rise later. Current cottonseed prices are at a high level, and if seed cotton prices fall short of expectations after the new crop arrives, profits from pre-sales can partially hedge risks. However, this also reflects ginners' concerns about high acquisition costs for the new season, as high opening price expectations will squeeze processing margins.

Practical Recommendations

For Buyers - Monitor basis changes of high-quality cotton from northern Xinjiang Corps farms; if basis falls, consider replenishing stocks timely to avoid cost spikes during new cotton procurement. - For southern Xinjiang cotton, combine futures hedging to lock procurement costs, build positions in batches using basis advantages, but strictly control quality indicators. - Closely track reserve cotton sales pace; if volumes increase, spot prices may face pressure, so consider postponing purchases.

For Foreign Trade Enterprises - Active cottonseed pre-sales imply high opening prices for seed cotton; leave room for raw material cost fluctuations in export quotations. - Use Zheng cotton futures for point pricing to lock forward procurement costs, especially monitoring the CF2701 contract's breakthrough at the 17,000 yuan/ton level. - Diversify procurement channels; consider non-mainstream production area warrants in Xinjiang, but strengthen quality inspection to avoid claims due to indicator mismatches.