In the final week of August 2026, the central reserve cotton sales floor price was set at 17,228 yuan per ton, unchanged from the sixth week. This seemingly ordinary figure encapsulates the supply-demand tug-of-war: during the vacuum before Xinjiang cotton hits the market, the policy floor price has become an invisible anchor for spinners' procurement decisions.
Event Background
China Reserve Cotton Management Co. launched the 2026 reserve cotton sales on July 20, and it has now entered its seventh week. The weekly floor price, based on the standard grade 3128B quality benchmark, is calculated batch-by-batch using inspection results and the quality differential table published by the China Cotton Association. This means actual transaction prices for different batches within the same week can vary due to quality differences, but the benchmark remains stable at 17,228 yuan per ton.
Notably, the floor price has remained unchanged for two consecutive weeks, sending a clear policy signal: amid fluctuating domestic and international cotton prices, the reserve is intended to act as a stabilizer rather than a price leader. For textile enterprises, this implies greater predictability in raw material costs in the short term, but also warrants caution about potential deviations between policy floor prices and actual market transaction prices.
Industry Impact
The impact of the unchanged floor price is not uniform across the supply chain. Upstream ginners and traders may become more reluctant to sell, supporting spot prices; midstream spinners face a dilemma—bidding for reserve cotton keeps costs controlled, but auction premiums and logistics costs erode margins; switching to spot purchases entails higher basis risk.
Regionally, new Xinjiang cotton is expected to arrive in mid-to-late September. Until then, reserve cotton is the most important supplemental supply source. The stable floor price helps smooth price fluctuations during the transition, but over-reliance on reserves may cause spinners to miss potential price dips after the new crop arrives.
For exporters, the dual fluctuation of RMB exchange rate and cotton prices is squeezing margins. At 17,228 yuan per ton (approximately USD 2,400), the price gap with ICE futures remains reasonable, but if the domestic-import spread widens, imported cotton may regain cost advantage, diverting some demand.