17,228 yuan per ton—that is the floor price for central reserve cotton sales in the seventh week of 2026 (August 31 to September 4), converted to standard grade 3128B. Since sales began on July 20, the floor price has fallen for several consecutive weeks, with a cumulative decline exceeding 3%. For textile enterprises, this is not just a number change; it signals a downward shift in the raw material cost center, and the procurement window may have opened.
Why the Floor Price Keeps Falling
The reserve cotton floor price is not set arbitrarily. It is dynamically adjusted based on market spot prices, international cotton prices, and supply-demand fundamentals, in accordance with national requirements. The seventh week's floor price dropped again from the previous week, directly reflecting the current pressure on domestic cotton prices and sluggish trading. The quality price differential table published by the China Cotton Association serves as the basis for premiums and discounts, further refining price differences for various grades, lengths, and micronaire values, so actual transaction prices may deviate reasonably from the floor price.
From a timing perspective, late August to early September is the transition between old and new cotton marketing years. Downstream orders have not yet been fully released, and textile mills are mostly taking a wait-and-see attitude. As the 'ballast stone' of the market, the floor price cut is essentially a signal from the policy side to actively release benefits to the market, aiming to ease the capital pressure on cotton-consuming enterprises while guiding market expectations and preventing sharp fluctuations in cotton prices.
Transmission Effects on the Industry Chain
The most direct impact of the floor price cut is reducing the raw material procurement cost for textile enterprises. Calculated at the seventh week's floor price, it is about 500 yuan per ton lower than the first week of July. For a mill consuming around 1,000 tons per month, this alone can save hundreds of thousands of yuan monthly—a substantial benefit for spinning segments that already operate on thin margins.
However, it is important to note that a lower floor price does not mean all enterprises benefit easily. The daily listing batches, quality variations, and bidding rules determine that the actual purchase price may be higher than the floor price. Additionally, the price gap between imported and domestic cotton deserves attention—when domestic reserve cotton becomes more cost-effective, some enterprises originally using imported cotton may switch to bidding for reserve cotton, affecting the pace of imported cotton procurement.
For upstream ginners and traders, the falling floor price will force spot prices to follow, compressing profit margins in intermediate links. Some traders with high holding costs may face loss-making sales, and the period before new cotton comes to market will see more intense market games.
Procurement Strategy and Risk Tips
For textile enterprises, it is not advisable to blindly chase highs or over-wait at this time. It is recommended to participate in bidding in batches based on order cycles and inventory levels, locking in some low-cost supply. At the same time, closely monitor quality indicators of daily listed batches and use the quality price differential table to calculate actual costs, avoiding situations where 'it looks cheap but is not economical' due to grade premiums.
For foreign trade enterprises, comprehensively consider exchange rate fluctuations, freight costs, and import cotton quota costs. If the reserve cotton floor price continues to decline, the price advantage of domestic cotton over imported cotton will further expand. You may appropriately adjust procurement structure to reduce dependence on foreign cotton, but also guard against yarn quality fluctuations caused by quality differences.